Primary residences going under the hammer increasing

The number of primary residences going under the hammer has risen sharply since the second quarter of 2024, following a pause triggered by foreclosure-related legislation introduced at the end of 2023.

Data from the Central Bank reveals that six primary residences valued below €350,000 were sold at auction during the second quarter of 2024. Additionally, three homes with market values exceeding €350,000 were auctioned. 

Notably, the six properties under €350,000 were sold at the first auction, while the three above that threshold were sold at the second auction. In contrast, no primary residences were sold at the first auction in the first quarter of 2024, and only one property valued over €350,000 was sold at the second auction. 

In terms of primary residences sold directly to third parties, Central Bank data shows that one residence valued below €350,000 was sold. Moreover, ten properties reverted to the mortgage lender after six months from the first auction; one of these had a market value under €350,000. 

At the same time, auctions are ongoing for another 70 residences, with 45 valued below €350,000 and 24 above this amount. Over 450 primary residence owners have received their first notifications for loan repayment delays exceeding 120 days, initiating the foreclosure process. 

Foreclosures involving €500 million worth of properties 

In the second quarter of 2024, 2,794 foreclosure notices were issued for properties valued at nearly €500 million, compared to 2,968 notices in the first quarter for properties worth €246 million. 

There has been a notable increase in notices, which banks and loan management companies send to borrowers with payment delays of more than 120 days, signalling the start of foreclosure. This is typically followed by a second notice, which lists the outstanding mortgage, interest, and other costs, giving the borrower about 30 days to repay. 

A slight reduction in the number of second notices, which set the auction date for properties, was recorded in the second quarter. These notices are issued when the borrower fails to settle the outstanding debt. 

Surge in primary residences going under the hammer 

Central Bank figures show that 462 foreclosure notices were issued for primary residences in the second quarter of 2024. The number of first notices doubled, with 146 properties valued at €33 million receiving them, compared to 82 properties worth €13.3 million in the previous period. Of these, 133 were valued below €350,000, and 13 were above. 

Few borrowers seeking out-of-court settlements 

Financial Commissioner Valentina Georgiadou pointed out that few borrowers have sought her office’s assistance since the introduction of new legislation at the end of 2023. Only eight cases have been submitted, and none could be investigated due to pending court rulings. 

Despite laws requiring the establishment of a Special Court for Foreclosures to prioritize cases involving primary residences valued up to €350,000, this court has not yet been created. Furthermore, Supreme Court guidelines call for fast-tracking cases related to these properties, but this process has yet to gain traction. 

Rising complaints from borrowers 

Jenny Papacharalambous, Director of the Borrowers Association, reported that requests for assistance from borrowers, especially concerning primary residences, continue to surge, with over 20 cases weekly. Michalis Paraskevas, President of the Association for the Protection of Primary Residences, expressed frustration over the courts’ lack of progress in handling these cases, highlighting inconsistent rulings for similar matters.