Cyprus home construction up again

Strong growth in the Cyprus construction sector was recorded for the second consecutive month in March with the number building permits authorised for new homes increasing compared to last year. 

THE NUMBER of building permits issued in March 2015 stood at 460 compared with the 448 issued in March 2014; an increase of 2.7 per cent, according to the latest figures from the Cyprus Statistical Service. Compared with March 2014, the total area of these permits increased by 21.1% to 71,301 square metres from 58,870, while their value increased 14.5% to €70.0 million from €61.2 million. During March, building permits were issued for: Residential buildings – 319 permits Non-residential buildings – 73 permits Civil engineering projects – 24 permits Division of plots of land – 37 permits Road construction – 7 permits During the first quarter of 2015 the number of building permits authorised for both residential and non-residential projects increased by 1% to reach 1,265 compared with the 1,253 authorised in the same period last year, while their value rose by 4.8% to €254.4 million. 

Speaking to the Cyprus Mail property valuator Periclis Markaris said that while the increase in building permits reflects decisions taken six to twelve months ago, it is also indicative of the improvement in the overall economic sentiment. “In 2013 almost no decisions were taken but things in 2014 improved,” he said. He also attributed the increase in the building permits to the decrease in construction costs resulting from the drop in energy prices as well as lower mortgage rates offered by banks in combination with new housing loan schemes. 

He added that another reason leading to the increase in building permits is related to incentives offered by the government to construction companies two years ago in the form of an additional 20 per cent density factor for grand scale projects; an attempt to help kick-start the economy through construction.

As a result additional building permits were issued which did not translate into additional construction activity, he said. New home construction The 319 residential building permits approved in March provided for the construction of 297 new dwellings comprising 165 single dwellings and 132 multiple dwelling units (such as apartments, semis, townhouses and other residential complexes). This is an increase of 53.9% compared with March 2014 when building permits were issued for the construction of 193 new dwellings. 

According to the Cyprus Statistical Service, building permits constitute a leading indicator of future activity in the construction sector.