On average, an increase of 65%-70% was recorded. construction cost young people residences from mid-2021 to the present due to successive crises, first caused by a supply chain disruption caused by the pandemic, and then the war in Ukraine. At the same time, according to its leaders real estate marketthere are also phenomena of speculation on the part of companies trading in material values, while the increase in labor costs is also vertical.

“The lack of garages is a daily headache that brings new homes closer to the deadline and therefore limits the supply on the market,” representatives say. construction industry. Strong demand in both construction and infrastructure projects, as well as the fact that many, especially economic migrants, left the sector due to the onset of the crisis, make it particularly difficult to replace workers and drive up wages.

Another reason is that in recent years there has been a significant increase building permits and new housing estates, thanks in part to the 24% VAT suspension measures, which have effectively been extended until the end of 2024. These objects are now being gradually sent to the market. However, it is standard practice in the construction industry that sales revenue must first be secured before the funds can be channeled into new projects, i.e. new building permits. This is the housing market today.

There is a large lack of workshops and the phenomenon of speculation on the part of companies trading in material values ​​on the market.

The above data has now begun to slow down construction activity, combined with increase in interest rates, which also seems to have begun to weigh on the market, especially for particularly expensive new builds that are even more difficult to finance solely with equity. In 2021, the country as a whole saw a significant increase in the number of permits by 26.8%, area by 47.2% and volume by 45.9%. Attica saw a 34.4% increase in permits in 2021, with both surface area (50.1%) and volume (35.7%) increasing.

On the contrary, overall in 2022 the picture was mixed, with slowing trends in the second half of the year. The number of permits increased by 4.6%, but the area and volume decreased by 8.9% and 2.2%, respectively. IN AtticaHowever, where demand is higher, private building permits increased by 9.6%, volume increased by 24%, and area decreased by 1.7%.

The pattern appears to be similar in the first two months of this year, as the rise in January was followed by a big drop in February. In particular, private construction in the first two months of this year increased by 1.1% in terms of the number of permits, by 0.3% in area and by 3% in volume. However, in February the number of permits decreased by 15.8%, by area – by 14.2%, by volume – by 21.7%.

These figures are, on the one hand, higher than at the height of the market crisis in 2016, but it seems that other interventions, perhaps of a legislative nature, are needed to further increase the supply. In 2016, the number of building permits for new buildings did not exceed 4,305, and in 2022 this number increased by 126% to 9,793, which corresponds to approximately 30,000 new apartments.

High selling prices and new specifications

Among the reasons that explain the slowdown that some developers have begun to put on the construction of new buildings, at least not before the completion of the sale of existing ones, can be called selling prices.

In the region of Attica, according to its indicators Bank of Greece (BoG)in the fourth quarter of 2022, realized prices rose by 15.2% year-on-year, the highest annual growth in decades, even surpassing those in the 2000s.

In particular, new buildings are estimated to have grown at an even faster rate, while nationally as a whole, their growth is estimated at 11.8% by 2022.

In practice, the increase translates into a minimum selling price of 3,500-4,000 euros/sqm, especially in the more expensive areas of the northern and southern suburbs, where demand is higher.

Another important reason that pushed prices up is, of course, the new contractual obligations introduced by the latest building regulation regarding the construction of energy efficient buildings (there is even a bonus for additional square meters if the building is ranked). in the highest rating of the energy certificate).

However, the cost of these materials has increased dramatically over the past two years. Thus, according to the online ad platform Spitogatos Insights of the same name, today the average asking price of new buildings with high energy efficiency reaches 4,100 euros/sq.m. from 3 311 euro/sq.m. two years ago, up 24%.