Residential property prices in Greece fell at a slower pace in the second quarter of the year compared with the previous three-month period, suggesting that Greek property prices could be stabilising following recent improvements in the economy.

Given that Greece has a home ownership rate of around 80% – one of the highest in Europe – it is unsurprising to find that property accounts for a significant share of household wealth in the country.

Greece’s housing market has been adversely affected by high property taxes imposed to plug budget deficits, stringent mortgage lending conditions, and high unemployment rates.

In total, the average price of a home in Greece has fallen by 41.4% from a peak hit in 2008, when the country’s protracted recession started.

But the latest data from the Bank of Greece revealed that apartment prices fell by 2.7% in the second quarter of 2016 from a year earlier, with the annual pace of price declines decelerating from 4.7% in the first quarter.

“The encouraging sign is that the real estate market is reacting to the milder recession and an improving trend in the labour market during a period when liquidity conditions remain tight,” said National Bank economist Nikos Magginas.