• Home
• /
• Business

Greek building activity drops in March on high cost

ATHENS - Greek building activity, measured by the number of new permits, fell 46.6 percent year-on-year in March, hurt by rising costs and decreased demand, Greece's statistics service (NSS) said on Friday.

NSS said 3,962 new permits were issued nationwide in March, corresponding to 947.8 million square metres, versus 7,420 permits a year earlier, which covered 1.905 million square metres.

Rising oil prices have translated to higher end-prices for construction material, leading to higher end-prices and a drop in demand for new buildings.

"The main reasons for the drop in permits in March was the continuous oil price rise and subsequent construction material cost increases," said Nicholas Magginas, an economist at National Bank of Greece.

"House prices have also continued to rise which has led to a decrease in domestic demand. For the following months, construction activity is forecast to continue to be lower than last year," Magginas said.

In December Greece revised its property tax laws partly to cut down on its black economy, and introduced a single catch-all tax which hurt demand, analysts said.

A total of 14,216 new permits were issued around the country in the January-March period, down 26.2 percent from the year earlier period, amounting to 3.761 million square metres, NSS said.