House building slows amid high costs

Building activity declined slightly, slowed by rising costs in the first six months of 2022 compared to the same period last year, official data shows.

The construction sector’s activity fell slightly in the first half of the year, with approved building permits dropping 2.3% to 3,898 from 3,990 in 2021, as the increase in the prices of building materials takes its toll on the industry.

Damage to the industry is much larger than the number of permits indicated, as the total value of these permits decreased by 9.1%, while the total area covered dipped by 12.4%. The value of permits issued in H1 2022 reached EUR 1.2 bln, down from EUR 1.34 bln in the same period last year.

The area covered by the building permits issued from January to June reached 1.078 million square metres, compared to 1.23 million square metres in the first six months of 2021.

The number of building permits authorised by local authorities in June stood at 626.

And the total value of these permits reached EUR 220.1 mln covering a total area of 202,100 square metres.

These building permits provide for the construction of 1.146 housing units.

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

The decrease breaks a gathering momentum as the number of building permits and their value has increased.

Cyprus’ real estate sector in 2021 had gained lost ground from the pandemic as building permits picked up the pace but are still well off the levels recorded in pre- coronavirus 2019.