Developers are expanding their investment plans in affordable housing as the government prepares a package of incentives to attract new investment in the sector, which is expected to be ready in the coming months.
At the same time, banks are taking a close look at affordable housing, with Alpha Bank making the first move on a Dimand project in Elaionas, according to information reported by Euro2day.gr.
Affordable housing, unlike social housing promoted by government ministries, involves the construction of low-cost apartments for rent on the basis of social criteria, rather than for sale by developers.
The incentives being prepared
The government has been in talks with market participants for some time, seeking a formula that will provide the right incentives to build low-cost apartments.
Property developer Dimand is among those taking part in the discussions and may be the first to have presented plans to build affordable housing, specifically in residential projects in Elaionas.
Speaking at a conference yesterday, Dimitris Andriopoulos, Dimand’s CEO, said the issue of incentives could be resolved in the coming months, putting Greece among the first countries, alongside Spain and Italy, to introduce them.
He said, “There is currently no appropriate legislative framework for affordable housing to work, since construction costs do not allow this type of housing to be developed with rents below 30% of workers’ incomes. For this reason, specific incentives need to be established by law, such as a reduced VAT rate on construction and tax incentives,” he said.
Plans and new locations
The listed company has announced plans to develop homes for rent on the basis of income criteria. The project is a residential complex with a total area of about 10,000 sq m on Petrou Ralli Street, in the lower part of Elaionas, comprising 140 apartments.
The apartments will range in size from 65 to 100 sq m and will have one or two bedrooms. The rent levels will be affordable for the middle class, at 25%-30% of household income.
Now, however, new locations are also under consideration, as Dimand has identified other properties suitable for similar investments, including in Piraeus, Ioannina and Thessaloniki.
Banks and projects
Meanwhile, banks are watching developments in the sector with interest, given its strong growth prospects. For the Elaionas project, Alpha Bank is providing financing, while sources say it may take the next step and acquire a direct stake in the project.
Banking executives say that, so far, banks’ plans in affordable housing have been limited to acting as financiers. However, they add that the possibility of taking an equity stake in projects is also being considered, since such investments offer returns as well as a positive social impact.