Cyprus construction industry enjoying a revival
Cyprus’ construction industry seems to be regaining confidence over the past year, as developers encouraged by an increase of activity, feel that the barren years of the real estate crisis are behind them.
The Federation of the Building Constructors Associations of Cyprus (OSEOK) says things are improving as developers see a bright future as big projects are in the pipeline, while others are expected to be announced. The manager of OSEOK, Frangos Prokopas said that the sector has seen an upward swing that begun in 2017 and has continued into 2018. He said the federation’s Activity Index has recorded a positive trend for the first time since 2010, standing at +12%.
The Activity Index measures the percentage of developers who stated that they saw their business grow in 2017. Meanwhile, the Work Cycle Index of the Federation measuring the percentage of contractors who have declared that their work load for 2017 was above normal or expected, minus the percentage of those who declare it to be below the norm, recorded a significant improvement too, standing at -37%.
But now developers are rather optimistic regarding the future as major projects are in the pipeline or expected to be announced. Prokopas is encouraged that the sector has started to disengage itself from its dependence on projects connected with the investment for citizenship scheme. He said that the focus of the construction sector is currently concentrated in two main activities, apart from luxury projects on the southwestern coast of Cyprus. He said that there is a significant number of houses being developed. Cystat figures show that 70.4% of the 1,984 building permits issued in the first four months of 2018 were for residencies. Furthermore, fortifying the argument that the industry is turning to the local market, 744 of building permits were issued for projects in Nicosia, a market dominated by Cypriot buyers.
“Now as the economy is stabilizing, people feel more confident to take out a mortgage, as the banks have started to give out loans, or to invest cash they have been saving up over the past five years.” The analyst also said that the significant increase in numbers of students studying at the Nicosia based universities has created a shortage in housing which has pushed up demand. That along with the various student dorm projects being carried out, a significant number of blocks of flats are being build. “I’m encouraged that the building sector is reinventing itself and becoming more diverse and less dependent on one type of investment.”
Nearly 50% of the property contracts deposited at Land Registry offices in the first half of the year were for properties purchased by non-Cypriots – and out of the total number of 4,470, almost a third (1,522) were for properties bought by third-country nationals.
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