New Building Regulation: Market Reaction to the Hellenic Republic Asset Development Fund’s Bonus Rules

The real estate market appears to be particularly disappointed with the new regulation from the Hellenic Republic Asset Development Fund (HRADF) regarding the New Building Code (NBC). After months of delays, the amendment has been submitted, but according to most contractors, it does not clarify the landscape nor will it boost construction activity. Amid this turmoil, several parties are expected to file appeals at European courts in the coming days, demanding full compensation for damages caused by the recent Supreme Administrative Court decision on the NBC. The new HRADF regulation seems to focus mainly on securing strategic investments through permits for projects that fit into specific spatial development plans. These permits are exempt from environmental equivalence due to prior scientific documentation, providing temporary relief for large investments. However, the regulation leaves unresolved key issues facing the construction sector. The December 11 deadline further intensifies the divide between old and new investment projects, creating unequal terms for those active in the real estate market. The cost of revising building permits is a critical issue, as already prepared studies, which carry high costs, are not covered by the refunds anticipated from the state. Many projects remain ‘in limbo’ due to decisions from the Council of State, forcing builders to revise permits and suffer significant financial losses. Owners of building plots who demolished their buildings to take advantage of the withdrawal clause find themselves in a difficult position, as new permits do not allow the original plan’s reconstruction. The application of environmental equivalence remains complex and uncertain. Engineers and investors believe the process will be time-consuming, and overturning the Council of State’s decision will be challenging without explicit agreement, which currently seems uncertain. The situation remains tense as the Council continues to review NBC articles, which may be deemed unconstitutional, causing further delays and disruptions in the market. Engineers cannot undertake new projects, urban planning approvals are delayed, and investors remain in waiting to prepare their business plans. With the new legislative regulation, unconstitutional provisions of the NBC are abolished, and urban incentives will now be documented within local or special urban planning schemes under the ‘Constantinos Doxiadis’ program, forming a predictable framework for investments, avoiding delays, and protecting the environment.