Confirmation that real estate will be auctioned with current commercial values came formally from the political leadership of the Finance Ministry.
With a written response to the House, following a topical question by New Democracy MP Nikitas Kaklamanis, the Finance Ministry confirms that auctions will be made with commercial values rather than objective ones. The document was granted to the Ministry. Finance department of the AADD and states:
The provisions of article 78 of Law 4472/2017 (Α'74) amended the provisions of articles 36 and 39 of the law. (EEC) No 356/1974 on the determination and determination of the first bid price for auctioned auctions for the purpose of harmonizing the law on administrative enforcement with the law of (joint) enforcement, in particular the provisions of Articles 993 and 995 of the Code of Civil Procedure, as regards the way of assessing the value of the seized property, as well as the definition of the first bid price of the property being auctioned respectively (relative and explanatory memorandum of law my).
It should be noted that the above provisions of the Code of Civil Procedure have recently been amended by the provisions of Law 4335/2015 (A'87) laying down the commercial value of the real estate on the above issues instead of the objective as it stands.
What does this mean for debtors
Given that the property market has collapsed over the past few years and the commercial values are far from being objective, even after the corrections, auctions will not be ruled out as potentially there will be bids with less money. The lowest price to be received may not be enough to cover debtors' debts, with the result that borrowers find themselves not only to lose their property but also continue to owe it.
However, an indicator of the under-utilization of the real estate auction measure is that only two real estates appear on the website of the Independent Public Revenue Authority, and in particular:
One concerns an apartment of 68 sqm and a co-ownership stake in Kypseli with a starting price of 84,897 euros and the second one concerns a plot of 1,158 sqm in the settlement of Psathaki Preveza with a first bid price of 80,000 euros.
Electronic auctions
The issue is becoming topical as electronic auctions will speed up the process with ... summary procedures. The launch of the platform is currently being shifted from month to month in spite of pressure from lenders to move ahead with the process of disengaging banks from red loans.
Following the "reluctance" of notaries to register on the platform, the auctions are expected to begin in late November or early December. In any case, banks, however, want to ensure that the auction of thousands of properties will not lead to a dip in prices, which would have an impact on bank balance sheets.
According to the operational targets agreed by banks and SSM, NPLs should be reduced from 72.8 today (June 2017) to 65.9 billion euros at the end of the year to 53 billion euros at the end of 2018 and at EUR 40.2 billion at the end of 2019.
Similarly, NPEs have to be reduced from EUR 101.8 billion today to EUR 98.2 billion by the end of the year, to EUR 83.3 billion at the end of 2018 and EUR 66.7 billion, at the end of 2019.
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