Recent developments in the construction sector in Greece, such as the decision of the Plenary of the Council of State (CoS) that found the provisions of the New Building Regulation (NBR) regarding building height and building factor “bonuses” unconstitutional, are expected to significantly affect land prices.
Decrease in Value of Land with Previous Building “Bonus”
Lands that, under the NBR, offered increased building factor and building height, had acquired a higher commercial value. With the cancellation of these privileges by the CoS, the possibility of constructing larger buildings is limited, leading to a decrease in the value of these plots. Developers who invested in such plots may face financial losses, as the additional square meters they had calculated are no longer available.
Price Increase on Plots with Favorable Building Conditions
Conversely, plots located in areas with more favorable building conditions, such as a higher building factor or permitted height, may see their value increase. The limited supply of such plots, combined with the demand for larger buildings, may lead to an increase in their prices.
Impact on the Real Estate and Housing Market
The reduction in the possibility of constructing larger buildings may limit the supply of new homes, keeping property prices at high levels. This may negatively affect the affordability of housing for citizens.
Need for New Urban Planning
The government, recognizing the implications of the Council of State’s decision, is considering reinstating building incentives through new urban planning. This could offer new growth opportunities and stabilize the real estate market.
Overall, the recent changes in building regulations are expected to bring about significant restructuring in the land and real estate market, making it necessary for investors and developers to adapt to the new data.
Petros Kitsikoudis
Real Estate Consultant INVESTA Real Estate
Sources: news247.gr, ot.gr, skai.gr
