Moody's: Real estate prices will continue to rise in Greece

Real estate prices rose 1.5% on average last year, for the first time after 10 years, mainly due to improved macroeconomic environment and high foreign investment in housing, the rating agency said in a report.

"We expect house prices to continue to moderate in the next 12-18 months, which will be positive for Greek covered bonds, RMBS and banks," said Miguel Lope Patron, vice president of Moodys and one by the analysts who drafted the report.

The rise in prices will be moderate due to high real estate taxes, population decline, high interest rates on new housing loans and a limited increase in housing loans by banks, as they continue to focus on "red" "Loans, says Moody's.

Rising housing prices will reduce the losses of covered bonds with housing loans and RMBS if borrowers default on their debts and real estate needs to be sold to recover outstanding loans, the report says. "Rising housing prices will support banks' efforts to reduce their non-performing exposures, potentially making it easier to sell non-performing housing loans. In addition, rising property prices will increase borrowers' incentives to restructure their non-performing housing loans, given the potentially higher property prices, "said Moody's vice president, Nondas Nicolaidis, according to the ANA.