A shortage of construction workers is making it harder and more expensive for developers and contractors to complete projects in Cyprus. Industry figures say the problem could also slow efforts to increase the supply of homes.
Several factors are affecting the property market, according to government bodies and industry professionals. One of the most pressing is the lack of available workers.
Construction companies and small contractors are finding it increasingly difficult to recruit Cypriot construction workers. As a result, many jobs are filled by foreign workers.
The departure of a significant number of Syrians, who returned to their country after a change of regime, has added to the pressure. A number of Turkish Cypriots have also left to work in the north, where a construction boom may offer better daily wages.
The government tried to recruit workers from Egypt through a bilateral agreement, but the scheme did not achieve the expected results. We understand that some of the conditions contractors had to meet were too difficult for many businesses, particularly smaller firms.
Construction worker shortage threatens housing supply
The Cyprus Property Developers Association (CPDA) recently warned that the lack of construction workers was a major obstacle to increasing the supply of homes.
Securing planning and building permits is only part of the process. Developers must also be able to complete projects within a reasonable period. Housing policy, the association said, cannot be considered separately from the construction industry’s capacity to deliver new homes.
Permit process can involve several checks
Finding workers is not the only challenge. The process for employing foreign workers involves several government departments, and a permit can be affected by checks at different stages.
A contractor first applies to the Department of Labour at the Ministry of Labour. The department assesses whether there is a genuine shortage of workers in the market and may issue an initial approval.
The contract then goes to the Civil Registry and Migration Department at the Ministry of the Interior. It handles the final Temporary Residence and Employment Permit.
The application may be rejected, or a permit withdrawn, if migration officials find concerns such as a previous deportation, a criminal record or a potential risk to public safety. If that happens, the person’s employment becomes unlawful.
Checks can also take place at the construction site, even after the permits have been issued. The Ministry of Labour’s Inspection Service or the Police Aliens and Immigration Service may investigate whether a foreign construction worker is employed by the approved employer and in the authorised role. A permit may be cancelled if those conditions are not met or if the contractor breaches the terms of the collective agreement.
These checks are not, in themselves, a flaw in the system, particularly where an employer has broken the rules. They do, however, show how many authorities are involved and how a permit can be affected by problems discovered later in the process.
Syrian subcontractors take on a bigger role
Many Syrians have left Cyprus, but a significant number remain. Some have spent years working in Cyprus and know both the construction trade and the local system. They continue to play an important part in the building industry.
In recent years, some have moved from working as labourers to becoming subcontractors. Contractors looking for specialist teams may now turn to them, and those subcontractors often recruit former colleagues.
With demand for workers high, some labourers have raised their prices. Others have moved away from daily wages and now charge by the job.
The result is higher labour costs for contractors, alongside greater difficulty in finding workers. For a market trying to deliver more homes, the shortage is becoming an increasingly serious obstacle.
By Angelos Angelodimou
Translated and adapted from an article published by Politis
