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Banks give cheap loans to sell their real estate

7 January, 2021

Banks give cheap loans to sell their real estate

By Eugenia George

Favorable financing up to 85% of the property price and a preferential interest rate close to 3% are offered by banks for all real estate purchases made through the special promotion and sales platforms they have created. These are platforms that have been "set up" specifically for the promotion or transfer of real estate that already belongs to the institutions and which, in order to facilitate their sale, are accompanied by special financial lending programs in an effort to rekindle the buying interest.

Such platforms are the "properties4sales" created by Piraeus Bank, the "realestateonline" of the National Bank, the "findyourproperty" of Eurobank, while a platform for the promotion and sale of its privately owned properties is expected to be launched at the beginning of next time and Alpha Bank. In this way, banks are actively involved in the sale of individual properties, such as apartments, shops, small or large tourist accommodation and plots, which have been acquired mainly through auctions.

The properties owned by the banking system amount to about 25,000. The creation of platforms for their disposal is part of the effort to make better use of them, to the extent that "eauction" is not preferred as a tool for their commercial promotion. The "eauction" is the institutional hub created in 2018 for online real estate auctions and is a complete database for all scheduled auctions, enabling those interested to claim a property that is being liquidated. It does not, however, allow anyone to see through the photographic material the property that is put up for auction, with the result that the buying interest is limited. Thus transfers to third parties - other than banks - are a very small part of the transactions that take place.

The main advantage of the properties that are available through a privately owned banking platform is that the institution has "cleaned" from irregularities the property that it brings out for liquidation. The legalization of any arbitrariness is a condition before each transfer and the acquisition of a property directly from the bank relieves the buyer of surprises and ensures the reliability of the transaction. Similar platforms also function as projection points with the necessary photographic material, before the interested party sees the property up close - through a real estate agency -.

The most basic innovation of this initiative developed by the banks is the possibility given to the interested and potential buyer to participate in the auction and to claim a property by submitting an electronic offer and if he bids to acquire it. The first platform created with these features is the "properties4sales" of Piraeus Bank, which also has the largest real estate stock with a wide spread throughout the country. As explained by the senior general manager, head of the Real Estate Group of the Piraeus Bank Group and CEO of Piraeus Real Estate, Mr. George Kormas, the value of the properties under management amounts to 2.6 billion, of which 1, 5 billion corresponds to commercial real estate, while 296 million is the value of residential real estate. The bank uses a multi-channel approach for their disposal, ie either through a network of brokers or through the banking network, while the transactions made through the "properties4sale" platform since its launch in June 2017 amount to 188 and correspond to 24.1 million

The electronic platform "realestateonline" of the National Bank also provides the opportunity to submit a bid for the purchase of real estate. As noted by the general manager of Real Estate of the bank Mr. Giannis Kyriakopoulos, the platform already has 1,100 properties worth 118 million, to which will be gradually added another 3,400 that are now in the process of settlement. In 2020, 185 properties worth 21 million were sold, of which 68 through the platform through the buy now process and 47 through an online auction.

Eurobank's real estate portfolio - not including Grivalia's investment portfolio - numbers 5,000 properties, of which 1,500 are ready for sale. The platform used by the bank to promote the properties that are already in its possession is "findyourproperty" and although the relevant node does not make sales, the bank, as explained by Despina Chamilaki Senior Partner - REO Portfolio, " is distinguished for the active utilization of its real estate portfolio, having to date proceeded to individual sales of about 500 properties in the last two years, as well as the sale of two large packages (Opus and Star) with properties of all categories ".

The portfolio sales policy is preferred as the most effective for the better utilization of the real estate stock that the banks have in their balance sheets and the head of Alpha Investment and Real Estate Management Mr. Giannis Ganos. In terms of properties that come from auctions, Alpha Bank relies on the model of their internal design and management, while utilizing the possibilities of outsourcing, in order to achieve the maturity of sales. According to Mr. Gano, the result of these actions is the implementation of transactions over 300 million from 2018 until today, a fact that reflects the success of the model.

In the era of "platforms" the Greek real estate market
The Greek real estate market is about to enter the era of "platforms" in 2021. The need for more active management, e.g. sale, or rent of hundreds of thousands of properties in the coming years, requires the corresponding adjustment of the mode of operation of the real estate market, at the level of promotion. This will happen gradually with the utilization of new technologies and the Internet, of course using the experience from other countries.

Already, in the Greek market, in addition to electronic ads, there are new real estate platforms from the Altamira Properties of doValue, but also from the Greek start-up company Prosperty (https://theprosperty.com/el). Also, according to information from "K", some "red" loan management companies are in discussions with the BidX1 platform, with the object of its activity in the Greek market. BidX1 started in 2011 in Ireland, initially to promote real estate for auction and then as a fully digital real estate trading platform, with a presence in the UK, South Africa, and from 2019 in Spain and Cyprus. To date, the BidX1 platform has sold 10,000 properties worth more than 1.8 billion euros.

As the volume of real estate that will be ripe for development increases, so will the platforms of the Greek real estate market be enriched with content. What is certain is that the needs for professional management and promotion, probably in cooperation with real estate agencies, will be huge, as the existing stock of unsold real estate will actually double, from around 100,000-120,000 today, to over 200,000 within the next three to five years. As the process of managing non-performing loan portfolios progresses, so will the volume of real estate that will require some kind of utilization.

In fact, in addition to the sale, or rent, an important part concerns the maturation and preparation of real estate. For example, Prosperty has set up a team of people and professionals (eg notaries, lawyers, etc.) with whom it works to prepare the properties assigned to it by companies, or individuals to be managed. In the near future, 500 new properties will be added to the company's platform by companies, such as the National Bank and Noval Property of the Biochalco group, while the company is also discussing with a number of "red" loan management companies, in order to enter into partnerships to promote and their own real estate.

Respectively, doValue, through Altamira Properties, creates its own "channel" for the utilization of its real estate. However, as previously announced by Mr. Tassos Panousis, CEO of doValue, in several cases of real estate will be preceded by investments to improve their quality characteristics, and even their reconstruction, with the ultimate goal of maximizing their value.

Intrum Hellas has also made moves for the more active management of its properties. The company has established Intrum Real Estate Services / REO, which it has staffed with specialized real estate executives, aiming at a more active management of its real estate. The ultimate goal is to increase the demand for the company's real estate, both from institutional investors and middle-class people, who will be the main buying group for Intrum residential real estate. Quant has also set up its own real estate management company, also seeking specialized management solutions, in addition to promoting real estate to date through real estate agencies or online classifieds.