BUSINESS

Construction shows signs of sustained recovery

NIKOS ROUSSANOGLOU

TAGS: Economy

Construction showed signs of recovery in May, as the number of building permits shot up 7.4 percent, according to independent statistics agency ELSTAT.

Specifically, 1,453 building permits were issued in May, for an area totaling 268,900 square meters.

Area-wise, new construction is 5.7 percent down from May 2018, and, for the first five months of 2019, is 13.3 percent less than the same period in 2018.

Nonetheless, experts in the sector view the numbers positively, saying 2018 was a rebound year from very low levels in the years since the financial crisis hit Greece. The current numbers show that the rebound in 2018 was not a one-off and that the sector’s recovery can be sustained.

The same stabilization at levels higher than in previous years is seen in construction materials. Cement group Titan, which published its half-year results a few days ago, said that there are positive indications that the market has finally put its deepest crisis behind it.

It also saw the tourism boom as helping construction, with higher private demand for construction materials.

Other developments are viewed as helping the construction sector in its recovery.

The expected suspension of the 24 percent value-added tax on new construction (except for owners of main residences) will help to reduce the backlog of unsold properties and act as an incentive for the construction of new buildings.

Even more important is the 40 percent tax discount on expenses for energy, functional and aesthetic upgrades to buildings.

The proposal had been floated for years by the Association of Greek Property Owners, but they have only recently found officials willing to listen.

The way this will work is the following: Everyone who carries out such upgrades on their homes, or other buildings they own, will submit invoices, including VAT invoices and social security contributions, to the electronic tax system run by the General Secretariat for Information Systems and, rather than cash, will get credit on future tax payments.

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