Cyprus government, in its recent past, experienced austerity in the building and construction sectors. Although those years seem to be over now, experts argue that the construction sector still to a large extent depends on the country’s successful citizenship by investment program. Therefore, Cyprus property and real estate sector seems to be still fuelled almost entirely by the Cypriot passport.
Revival of the Construction Sector in Cyprus
Building and construction industries of Cyprus are now free from the most of the restraints of the crisis years that Cyprus went through recently. Nowadays, these industries are slowly reviving and the stakeholders are now more confident in the sector. While the newly emerging diverse activities such as student accommodation in the country encourage real estate investments and stakeholders believe the years of austerity are over; the industries of real estate, building and construction are still almost entirely fuelled by the Cyprus citizenship by investment scheme that focuses on Cyprus property.
The Federation of the Building Constructors Associations of Cyprus (OSEOK) says that the developers see a brighter future as big projects are in the pipeline, while others are expected to be announced.
The manager Frangos Prokopas of The Federation of the Building Constructors Associations of Cyprus argues that the building sector has seen the upward swing that began in 2017 continued in 2018, with indications that it is to continue in 2019. He says that 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% compared to +12 in 2017. The Activity Index measures the percentage of developers who stated that they saw their business grow. “However, these indices should not be taken literally but should be used as indicators rather than measurements of how many developers actually saw their business grow,” says Frangos Prokopas.
Trend of the Activity Index by OSEOK is now Positive
Frangos Prokopas says that what’s important is the trend of the index, which has taken a positive swing in the past few years. He says, “For example, the Activity index in December 2013 stood at -74%. It was a time when a lot of smaller developers closed. Now we see these smaller developers, reopening their businesses and taking on projects along with bigger contractors,”.
Not ignoring the fact that the construction and building sectors are still heavily dependent on the passport by investment program of Cyprus, experts believe that the diversification in the sector will keep the industry together with or without the help of the citizenship by investment scheme of the country.
“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,” says Prokopas. He is encouraged that the sector has started to disengage itself from its dependence on projects connected with the investment for citizenship scheme.