Cyprus Construction Sector Driven by Overseas Property Investors

The Cyprus construction sector is seeing a strong revival following the years gloom after the global financial crisis in 2007.

Stakeholders in the Cyprus construction sector feel that the barren years of the real estate crisis are behind them. However, the industry is still heavily dependent on the passport for investment scheme which focuses on new properties for overseas property investors.

The Federation of the Building Constructors Associations of Cyprus (OSEOK) said developers see a brighter future as big projects are in the pipeline, while others are expected to be announced.

Manager of OSEOK, Frangos Prokopas said that the Cyprus construction sector has seen the upward swing that began in 2017 continued in 2018, with indications that it is to continue in 2019.

The federation’s Activity Index continues to record a positive trend since recovering in 2017 for the first time since 2010. The index now stands (July-December 2018) at +16 per cent compared to +12 in 2017.

The Activity Index measures the percentage of developers who stated that they have seen their business grow. What is important is the trend of the index, which has taken a positive swing in the past few years.

Although it was noted that the driving force behind the growing Cyprus construction industry remains foreign money coming in through the country’s Citizenship for Investment scheme, there is a diversification of the market taking place which will keep the industry together in case the CIS weathers out.

Mr Prokopas said: ‘Public works had been put on ice during the previous years and the sector is now anticipating the declaration of big public projects by the government.’

He confirmed that a significant part of the industry’s activity is concentrated on housing, which is backed by Cystat figures showing that 69.5 per cent of the 6,408 building permits issued in 2018 were for residencies. Building permits recorded an 11.9 per cent increase compared to 2017.

It seems that the Cyprus construction sector is now fully back on a positive track.