Impact of Greece financial crisis on Balkan real-estate market

Abstract

This paper proposes that in a financial crisis the Real-estate market is the most sensitive market. It is the first to react when there is expansion of decline in the economy. Through the analysis of market conditions in several Balkan states in response to the impact of the Greece financial crisis on regional real-estate markets it is found that the financial crisis in Greece affected the regional economic activity. This was the main reason for declining of prices on the real-estate market. Real-estate market is first to face of a declining economy. But all markets didn’t have the same response to lowered economic activity and recession. Some countries faced large vacancies, other dealt with lowered prices and big projects being abandoned because of lack of interest and lack of finance. A clear understanding of the impact of the financial crises in the Balkan area provides a basis for lending institutions to develop lending policies. The correlation between real-estate market and financial conditions, as well as the changes in periods of expansion and contraction provides a basis for development policies for investors in the Balkan area.

Keywords: Greece financial crisis, US financial crisis, Balkan real-estate market, residential market, office market, retail market