The building braked due to cancellations and delays

By Eleni Botas

“Of all the sectors that we operate around the world, only in the construction sector of Greece there are delays and cancellations of orders.” This was emphasized, among other things, by the financial director of Cenergy, a subsidiary of the Viohalco Group, speaking last Friday during the teleconference to inform analysts, emphasizing that while high voltage cables used in renewable energy sources, etc. are in high demand, low voltage cables are in demand. used in construction are lagging behind due to deferrals and cancellations of orders.

Dimitris Kapsimalis, President of the Association of Builders of Builders, confirms this view about the “brake”, emphasizing that at this stage due to price increases the building has frozen, while those who build are those who have issued building permits and have committed to the consideration. “They can not help but build and are the only ones who proceed with the construction of buildings. The rest have frozen their plans and are holding a wait-and-see attitude until they see what will happen in the future,” he said.

In fact, Mr. Kapsimalis emphasizes that the government must from now on give a new extension to the imposition of VAT (ie the exemption is valid until the end of 2022), as for someone who is building now, there is no case to sell the apartments in 7 months “.

For cancellations of orders due to the large rise in prices of building materials has spoken to Capital.gr and Thanasis Tsokas, President of Web Construction, emphasizing that “no one proceeds with new orders, since he knows neither the prices at which he will receive them, nor the exact time of delivery of his order”.

Newly built properties are already being sold today with a cap of 300 per square meter compared to last year, both those that were recently completed and those that were left unsold in the last two years, due to the increase in construction costs by 40%.

This is the reason according to Mr. Kapsimalis that there is a significant lag in the sale of newly built apartments, confirming the recent research of Remax according to which, in 2021 the older apartments had the greatest demand, with 6 out of 10 buyers choosing houses, over 20 years old to ensure lower prices.

Bell for the cost of money

“Bell” for the Real Estate Investment Companies (AEEAP) were recently rung during the 15th Red Business Forum, by bank executives.

“There is money for financing, but when there are also returns”, said characteristically Mr. D. Konstantopoulos, General Manager of Specialized Units Strategy of Piraeus Bank.

According to him, the investment plans that are being launched should, on the one hand, take into account the forthcoming increase in the cost of money and the constant price increases of materials and energy, and on the other hand, whether there is a serious demand for the planned investments.

As Capital.gr wrote, the increase in construction costs combined with the increase in the value of the land by 50%, has led to a reduction in yields with the situation deteriorating due to the effects of the war.

At the same time, the large increase in the price of raw materials has increased the cost of construction of new logistics spaces with prices, from 450 euros per square meter to have climbed to 600 euros per sq.m.

Also under pressure are the returns which have now fallen to 7% for good quality real estate, while a few months ago the returns of logistics in Greece range between 8.00 – 8.50%, while for some who had succeeded to be placed at the beginning of the uptrend, the returns they secured were in double digits.

Asked about this issue, a senior executive of AEAP, said that “the cost of money does not scare us since we recently borrowed on good terms, while in terms of reducing yields is an important issue, but it is a strategy of each company for how to deal with it. “.

However, he admitted that we are going through a “waiting period for the implementation of new investments”.