The construction sector is one of the most important economic growth sectors in Greece, but at the same time it is a sector experiencing heavy recession on account of the general downturn in the country’s economy.
Between 2000 and 2004, construction output (as a percentage of GDP) stood at 7% on average; in the first quarter of 2012 this figure had fallen to just 3.75%.
In the period 2003-2007, the construction sector accounted for 8% of employment in the country; in the second quarter of 2012 this figure had dropped to 5.6%.
In absolute figures, approximately 400,000 people were employed in construction in 2007; by the second quarter of 2012 this figure had fallen to 213,500.
In the public sector, 269 projects were awarded by tender in 2010 (with a total value of over € 2 million), whilst in the first half of 2011 only 145 were awarded. In the first half of 2012, a total of 206 public works were awarded by tender.
In the private sector too, there has been a clear decline in construction activity in Greece, based on the volume corresponding to the permits issued each year. In 2003, building permits were granted for a total of 102.2 million cubic meters, whilst in the first half of 2012 this figure had dropped to just 8.5 million cubic meters. This massive reduction is due, on the one hand, to the lack of liquidity of Greek banks and, on the other, to the very heavy taxation of real estate.
(Source: Semi-Annual Report on Developments A 2012, Association of Greek Contracting Companies)
This situation has resulted in property prices plummeting, particularly in the case of commercial properties, although this has in turn created opportunities, frequently with very good returns.
A number of interesting investment opportunities have also arisen from the privatization of tourism properties, ports and marinas.
AP & Generalis, in cooperation with our network of associates and teams of specialists, provides its services to numerous Greek and (through its partners in the EUCONNEX network) foreign companies in the areas of construction law and property law, including: