FFi­irrsstt rri­is­see iinn bbu­ui­illd­di­in­ngg ppeer­rm­mi­ittss iinn 66 mmoon­nt­thhss

Financial Mirror (Cyprus) - - FRONT PAGE -

The num­ber of build­ing per­mits is­sued rose 1.2% in May, af­ter a nose­dive of 36.5% in April, while the in­crease in May sur­face and vol­ume was more pro­nounced at 10.2%, ac­cord­ing to the sta­tis­tics au­thor­ity ELSTAT.

This is the first pos­i­tive read­ing since Novem­ber 2013, when build­ing per­mits soared 36.2%.

Fol­low­ing the pos­i­tive per­for­mance in May, the 5month fig­ure of build­ing per­mits showed a drop of 22.6%, slower than the 27.8% posted in the 4-month pe­riod. The de­cline in 5-month sur­face and vol­ume was smaller, at -16.9 and -10.7%, re­spec­tively.

The 12-month trail­ing con­trac­tion dis­played a broadly sim­i­lar pat­tern with that of the 5-month with build­ing per­mits, sur­face and vol­ume re­treat­ing by 16.9, 14 and 10.8%, re­spec­tively.

The ge­o­graph­i­cal break­down of May build­ing per­mits showed West Mace­do­nia and the Io­nian Is­lands posted the high­est rise at 51.4 and 52.4%, re­spec­tively. By con­trast, Thes­salia and the At­tica re­gion (greater Athens) recorded the high­est drop in May, at 17.3 and 10.4%, re­spec­tively.

Build­ing ac­tiv­ity is among the sec­tors mostly hit by the cri­sis. The num­ber of build­ing per­mits plunged to 16,400 in 2013 from 65,500 in 2008, a cu­mu­la­tive drop of 75% that is three times higher than the GDP con­trac­tion over the same pe­riod.

Hous­ing loans, which are in­di­rectly re­lated to build­ing ac­tiv­ity, stood at EUR 70.6 bln at the end of June show­ing a cu­mu­la­tive de­cline of 13.2% from the peak recorded in Au­gust 2010.

In ad­di­tion, non-per­form­ing hous­ing loans reached EUR 25 bln in Q1 2014 in­di­cat­ing a height­ened threat for the sec­tor as well as the do­mes­tic econ­omy and so­ci­ety.

Apart­ment prices dropped 7.3% in Q2 2014, while the cu­mu­la­tive nose­dive stands at 36.3% from the peak posted in Q3 2008. The con­tin­ued neg­a­tive move­ment for the 22nd con­sec­u­tive quar­ter re­flects the on­go­ing re­ces­sion, lack of credit de­mand and in­creased tax bur­den on real es­tate prop­erty.

The Foun­da­tion for Eco­nomic and In­dus­trial Re­search’s (IOBE) in­di­ca­tor of con­fi­dence in the con­struc­tion busi­ness eased by 0.1 points to 84.1 points in July. The monthly move­ment re­flects a drop in pri­vate con­struc­tion by 9 points and a 2.2 points in­crease in the pub­lic works’ con­struc­tion con­fi­dence.

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