Greece’s cash-strapped homeowners facing tough call on “green” renovation

The spirit is willing, but the flesh is weak. Most Greeks would welcome the transition towards a green economy, but since the country is still feeling the aftermath of an acute ten-year debt crisis and the COVID-19 pandemic is taking a heavy toll on the economy, they cannot afford to take the steps needed without substantial state support.

According to a recent survey conducted by the Hellenic Property Federation (POMIDA), 65 percent of property owners in the country would want to renovate their houses to make them more energy-efficient and environmentally friendly, but they simply cannot afford that kind of investment.

The survey was part of wider research carried out during the first quarter of 2021 by the International Union of Property Owners (UIPI), a pan-European association based in Brussels. It brings together 31 organizations from 28 countries and represents the owners of up to 25 million dwellings across Europe.

UIPI’s aim was to assess European property owners’ capacity and willingness to renovate and how the COVID-19 pandemic affected their plans.

Around 10,000 property owners participated in the survey, including 728 in Greece. The results showed that the overwhelming majority of respondents supported the aim of greening the economy and readily recognized the associated economic and environmental benefits, but needed strong incentives like tax reductions, subsidies, grants and loans to be able to actively participate in the process.

The financial crisis has dealt a serious financial blow to many property owners, Nikos Tsatsis, chief development officer at PLASIS Real Estate and Development, a real estate agency in Athens, explained to Xinhua. “They do not have the same income as they had in the past and they find it difficult to finance a renovation project. There is a lack of liquidity and it is also difficult to get a loan.”

About 80 percent of Greeks are property owners, 1.6 million individuals declare income from renting out property, and most of the country’s buildings are old and outdated with low energy efficiency, as the construction sector had collapsed during the debt crisis, according to POMIDA.

Many landlords would also be interested in renovating their properties for rent, but without state support it is not a viable option for them.

“They know they could get higher rents if they upgraded their buildings or apartments, but the capital they would need to invest to upgrade is much higher than the profit they could gain from the rental,” Tsatsis explained.

“The phenomenon of energy poverty mainly affects poor tenants, who usually happen to have to deal with equally poor landlords,” Stratos Paradias, president of both UIPI and POMIDA, told Xinhua.

“Without state support, such as tax reliefs and subsidies, those landlords will not be able to break this barrier,” he said.

Last week, the Greek government announced a scheme under which property owners can claim a 40 percent income tax deduction on renovation expenses of up to 16,000 euros (19,200 U.S. dollars) per property.

The measure concerns renovation projects completed between Jan. 1, 2020, and Dec. 31, 2022, and does not cover material and equipment costs, only labor. According to POMIDA, this is a step in the right direction, but not enough to accelerate the intended “renovation wave.”

In recent years, under the Greek Ministry of Environment and Energy’s “Exoikonomo-Aftonomo” program partially funded by the European Union (EU), property owners meeting the eligibility criteria (including income) can apply for subsidies and loans at low interest rates to make their buildings more energy-efficient.

“The programs like ‘Exoikonomo’ are certainly useful, but are just a drop in the ocean of real needs, which are enormous,” Paradias commented.

“The pandemic has caused delays and affected many things, including the willingness to, and primarily the capability of, upgrading existing buildings,” he added.

The insecurity brought about by COVID-19 has seriously impacted the property owners’ renovation plans. According to the survey, most homeowners across Europe have postponed or downsized their plans, while others have either abandoned the idea altogether or cut back their budget.

In Greece, 65 percent of homeowners have postponed their renovation plans, and 24 percent abandoned the idea. The number of those who intend to spend up to 5,000 euros on renovation has doubled, but higher prospective budgets are few and far between.

Despite the current difficulties, Paradias remains optimistic about the future. “I believe that with the advances in technology and vaccination, we will soon be able to leave behind this entire problem,” he said. (1 euro = 1.20 U.S. dollars)