Construction activity slump in 2020 after 5-year boom

Construction activity declined in 2020 for the first time in five years, building permits dropped in area and value, as the industry felt the effects of the disgraced “golden passports” scheme plus the pandemic.

In 2020, the total value of building permits issued decreased by 27.3%, the entire area covered by 12.6% and the number of housing units by 3.5%.

A decrease was recorded in the number of projects requesting a permit, as a total of 7,023 building permits were issued compared to 7,218 in the previous year.

Nicosia and Famagusta were the only districts to see an increase in building permits, reflecting housing demand from Cypriots; permits in the capital increased 6% to 2,477 from 2,334.

In Famagusta, building permits increased to 282 to 318, an increase of 12.8%.

Larnaca permits dropped from 1,020 to 871 (-14%), while Limassol permits fell from 1,961 to 1,854 (-16%) and Paphos permits decreased to 855 from 974 (12.2%)

In December alone, the number of permits decreased to 648 from 686 in November; their value was EUR 171.6 mln, down from EUR 295.5 mln and in the previous month.

December’s building permits provide for the construction of 752 home units, compared to 831 in November.

Building permits for housing projects across Cyprus dropped by 2.1% in 2020, while permits for non-residential buildings fell by a steeper 12.1%

Reflecting high demand from Cypriots, building permits for housing projects in the capital last year increased 13% to 3,022 from 2,674 in 2019.

Housing projects acquiring a permit last year in Famagusta rose to 549 from 402 in 2019, an impressive 35% increase.

Cyprus’ construction industry had a turbulent year in 2020.

After being discredited by a ‘gotcha’ AlJazeera video portraying high ranking Cypriot politicians ready to sell passports to criminals for cash, the golden passport scheme was scrapped.

The passport scheme was based on property sales by foreign investors.

Coronavirus lockdowns and restrictions added more strain to the industry, which shut down during the first lockdown in March 2020.

Building permits constitute a leading indicator of future activity in the construction sector.