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The economic crisis has seriously affected the construction sector in Greece. The registered decline in the sector this summer is over 30% compared to the same period of the last year. According to the report of the National Statistical Service, only 4,623 constructions permits were issued for the first half of this year, which is significantly less than their number in 2009. The regions of northern and central Greece are most affected as well as the islands. The construction activity there decreased by between 40% -50% compared to the levels of the last year.
 
Key factor for the decline of the construction activity is the low demand due to lack of bank liquidity. Financial institutions grant loans to finance the sector and for individual buyers of houses very rarely and at increasingly difficult conditions. According to the Technical Chamber of Greece, the construction sector in Greece is in its worst state in the last five years and the trends indicate deterioration in the short term. “We are talking about a vicious circle, which is the result of the government policies in taxation (with or without the participation of the expert Troika and the memorandum of financial aid),” stated the President of the Chamber Giannis Alavanos in an open address to the media. He sharply criticized the decision of the socialist government of George Papandreou to resort to increasing the taxation rates of real estates and blamed the government in lack of liquidity in the domestic market that suffocates the entrepreneurship in the country. He said the abolition of collective labour relations (not yet officially in force) without the introduction of effective measures to stimulate the market and the economic development are some of the reasons for the decline of the construction industry this year. Obvious is the lack of a comprehensive strategy for urban development, infrastructure and construction activity, said Giannis Alavanos. He also noted the poor organization of the state institutions related to construction.