Banks and servicers are considering a new model for monetising the 15,000 homes they hold as they seek ways to improve returns on their portfolios.
A proposal under consideration would allow buyers to secure a home while the seller continues to prepare the property for sale, creating a win-win for both sides. However, obstacles to bringing the properties to market remain.
Alexandra Fatsea, Deputy Managing Director of Intrum Hellas & Managing Director of Intrum REO Solution, said yesterday at a panel discussion at the Prodexpo conference that servicers hold a stock of about 8,000 properties, of which 6,400 are residential.
«About 55% of these are in Attica and Macedonia. Another 8,000 are owned by banks. That brings the total to around 15,000 residential units», she said.
She went on to explain that Intrum Hellas mainly sells properties individually rather than in packages. This is also the strategy followed by banks, in particular Piraeus Bank, according to an earlier report by Euro2day.gr.
And that is what we will continue to do, Ms Fatsea said.
«One property to one buyer. We tried bulk sales. In my view, that did not work in Greece. The reason was that investors viewed them as distressed assets, leading them to offer very low prices. But it was a very important experience, because it led us to consider more innovative methods», Ms Fatsea explained.
Deals before properties are fully prepared for sale
The new model under consideration would allow buyers to secure a property earlier, while the servicer continues to prepare it for sale.
«What we are considering, and believe will be of great interest to investors, is buying properties before they are fully ready for sale. In other words, they would provide the capital to buy properties from our inventory. We would prepare them, so that the end buyer could have them available quickly», Ms Fatsea said.
The number of REO properties remains steady
The composition of the REO property portfolio is also notable. The total of 15,000 has remained steady in recent years, although the properties themselves have changed.
«On the one hand, properties are sold; on the other, new properties emerge from non-performing loans entering the portfolios. The total of 15,000 has remained stable for some time and is expected to stay at about this level in the coming years», industry sources told Euro2day.
Obstacles remain
At the same time, obstacles to making use of the properties managed by servicers persist, according to Lila Pateraki, Chief Real Estate Services Officer at doValue Greece Real Estate Services.
She said that an estimated 15%-30% of properties face serious planning issues linked to Category 5 unauthorised construction. She also noted that preparing a property for sale takes six to 12 months in other countries, while in Greece it takes more than two years.
«The delay is not in finding a buyer, but in bringing a property to market», she stressed, noting that finding a buyer once the property is ready can take less than three months.