Construction: Holds up despite the increase in construction costs

Despite the soaring cost of construction in recent years, the increased construction activity we saw in Greece in 2020 continues to this day. However, growth is not taken for granted as the industry worries about reduced mobility by 2024.

Specifically, during the period between November 2022 and October 2023, the number of issued building permits reached 26,977, marking an increase of 9.6% compared to the corresponding period of the years 2021-2022. The permits in question corresponded to 6,232,878 square meters in surface area and 28,905,945 square meters in volume, recording increases of 15.6% and 20% compared to the period November 2021 – October 2022. Of course, the rate of increase did not exceed record building growth between November 2020 and October 2021, when we had a 20% increase in building permits, 41.3% in surfaces and 37.8% in the volume of constructions.

The development of the sector is impressive, especially if we take into account the significant increases recorded in the last two years in the prices of projects and construction materials. The general price index for project categories and new building construction recorded a 2.9% increase in 2023 compared to 2022 – which, notably, had seen significant increases of 7.3% compared to 2021. The largest price increase within 2023 saw plumbing projects with 3.5%, followed by aluminum constructions and painting with 3.4%.

Significant increases were also recorded in the prices of construction materials, with the general index being 5.6% higher in December 2023 than in the corresponding month of 2022. The largest increases were seen in artificial stone materials (12.1%). , glassware (9.8%), marble and granite (7.4%), but also cement (6.1%).

Rising building material prices are expected to slow the construction sector across Europe in 2024 and 2025, with European construction market analysis network Euroconstruct estimating that new home construction and completions are expected to fall back to 2016 levels until the end of 2025. It remains to be seen if our country will follow the general trend or if it will be the bright exception.