Greece: The rebound of the construction sector
Driven by the market recovery, activity in the Greek construction and infrastructure sector is finally picking up. There are 69 infrastructure projects in the pipeline for completion by 2022 with a remaining investment requirements of €21,4 bln. This following section sums up the most notable trends in the industry and elaborates on what to expect in the coming years:
1.Tourism driving Greece’s Construction Industry
The dynamic performance of the tourism sector appears to be driving Greece’s construction industry, which is seeing the first strong signs of recovery.
Citing a rise in demand for property, increasing investments and stronger employment rates – all due to growing interest in tapping into Greece’s soaring tourism figures, experts say construction will be back in business soon.
According to recent Hellenic Statistical Authority data, private building activity has already picked up due to the construction of new hotel units, the development of Airbnb short-term leasing opportunities, Greece’s ongoing “home-savings” program and to incoming investments in organized and branded retail and wholesale networks.
Add to this government approval of a number of large-scale infrastructure projects across Greece, and construction is set to move out of the last few years of sluggish activity.
At the same time, market experts say, all the more home owners are seeking to take advantage of unused properties, renovating or reconstructing these in order to use them as Airbnb rentals. Large groups or foreigners, meanwhile, are benefiting from Greece’s golden visa program, entering the market, purchasing abandoned or old properties in bulk to be used as short term rentals. Investments currently underway include scheduled construction upgrades at regional airports, ports, marinas and road networks across Greece.
2. Infrastructure spending
Greece has a relatively developed infrastructure that enables the uninterrupted implementation of most investment activities. Nevertheless the quality of infrastructure and the need for investments in terms of both capacity expansion and quality improvement is evident. For that reason through EU funding and private investor participation there are 69 infrastructure projects in the pipeline for completion by 2022 including:
- Construction of Metro in Thessaloniki, extension of Athens metro to Piraeus, the new Metro Line 4 in Athens and Tram extension.
- Motorway projects.
Infrastructure project pipeline in Greece
There are 69 infrastructure projects in the pipeline for completion by 2022 with a remaining investment requirements of €21.4bln. Claim your share on that budget.
3.Renovation dominates the domestic market
According to studies conducted by the Greek Ministry of Environment and Energy (500.000 energy inspections in buildings have been completed in the last 3 years) the majority of the buildings have ranked at G category meaning high energy costs and very low energy performance. Since Greece is trying hard to implement and comply with EU regulations relating to the energy sector, addressing this issue seems quite challenging. Taking into consideration the economic status of Greece and the fact that the majority of engineers and property owners are mainly working in building renovations, both in residential and commercial projects, plus the above mentioned facts, the timing is excellent for promoting the advantages of energy efficient upgrades through modern building materials for financial and environmental reasons and for taking action in adopting EU regulations regarding energy efficiency.
4.Reflation of building activity in Greece
BUILD EXPO GREECE 2019 emerges in a time where building activity in Greece rebounds. In November 2018, in Greece, there was a rise of 18% in building permits, 52,3% in building surface area and 53,8% in building volume in comparison to November 2017.
Rise in building permits
Rise in building surface area
Rise in building volume
In just a few years, Greece has gone from a risky prospect to a must-have destination for global hospitality investors.
Last but not least as a member of the European Union and the Eurozone, Greece continues to be the economic hub of Southeast Europe, an ideal gateway to the Middle East, Western Europe, and North Africa, and an emerging logistics hub for the entire region.