Monitoring commercial property prices during the crisis: evidence from Greece

The recent economic swing caused by the financial crisis has had a severe impact on commercial property prices in Greece. The already hard to monitor commercial property market has become extremely illiquid and its investment indicators have been distorted by low business activity, limited demand, very few transactions and immediate need for liquidation by distressed owners. The objective of this paper is to establish the most important determinants of commercial property rental and open market values in Greece, within the crisis. Furthermore the particularities and distortions of the market are highlighted along with the difficulty in monitoring its trends. The paper concludes with a brief presentation of the recent effort of Bank of Greece to produce commercial property price indices and its first results.