Construction and housing statistics (2013)

Alan Lawton
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Construction and housing statistics (2013)

Cyprus : construction and housing statisticsTHE STATISTICAL Service of Cyprus (CYSTAT) has published the annual report “Construction and Housing Statistics, 2013”.

The report contains detailed data on the construction sector, pertaining, inter alia, to output, capital formation, inputs, new dwellings completed, building permits authorized, labour cost index and price indices of construction materials.

The main developments in 2013 were:

(a) The construction sector continued for the fifth consecutive year to be in recession. The rate of growth of the sector in 2013 (in terms of value added at constant prices) is provisionally estimated to have recorded a decrease of 30.6% compared to a decline of 19.3% in 2012.

(b) The gross output of the sector at current market prices was reduced in 2013 by 23.7% to €1,796.8 million compared to €2,356.4 million in 2012. The subsector of buildings construction and civil engineering recorded a decrease of 20.6%, while the subsector of land and buildings development registered a decline of 37.3%.

(c) New residential buildings accounted for 24.7% of the total gross output of the subsector of buildings construction and civil engineering, new non-residential buildings (offices, shops, hotels, factories, etc.) for 18.8% and new civil engineering projects (roads and bridges, water supply and sewerage networks, telecommunications and electricity lines etc.) for 36.6%, while repairs, maintenance and others accounted for the remaining 19.9%.

(d) Employment in the sector was reduced from 27,843 persons in 2012 to 22,852 persons in 2013 and accounted for 6.6% of the gainfully employed population.

(e) The number of persons registered as unemployed increased from 6,177 persons in 2012 to 7,263 persons in 2013.

(f) Labour cost in construction decreased by 8.5% compared to an increase of 1.2% in 2012. The price index of construction materials recorded a decline of 0.4% compared to an increase of 0.8% in 2012.

(g) The number of new dwellings completed decreased by 41.6% to 3,833 dwelling units compared to 6,565 in the previous year. By administrative district, the number of new dwellings is distributed as follows: Lefkosia (Nicosia) 1,400, Ammochostos (Famagusta) 264, Larnaka 644, Lemesos (Limassol) 833 and Pafos 692.

(h) The average area per dwelling completed in 2013 was 235 square metres for houses and 144 square metres for apartments, compared to 234 and 128 respectively in 2012.

(i) The cost of construction per square metre (excluding the value of land) decreased from €988 in 2012 to €976 in 2013 for houses, while it increased from €832 in 2012 to €900 in 2013 for apartments.

(j) The dwelling stock at the end of the year amounted to 441 thousand dwelling units, of which 61.0% were in the urban areas.

Further reading

Construction and Housing Statistics, 2013

Ayia Napa marina moves forward

Nigel Howarth
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Ayia Napa marina moves forward
Ayia Napa Marina - SourceG. Caramondanis Investments Ltd
Ayia Napa Marina – Source G. Caramondanis Investments Ltd

THE CONSTRUCTION of the marina at Ayia Napa has taken a step forward with news that the Ministry of Energy, Trade, Industry and Tourism has received a €25 million bank guarantee from M.M. Makronisos Marina Ltd. for the proper execution of the work.

A few days ago permits for the division of the land were approved for the marina’s road network and the infrastructure needed such as parking areas, green spaces and public walkways.

The mayor of Ayia Napa, Yiannis Karousos, expressed his satisfaction with this latest development saying that the submission of the bank guarantee signalled the start of the construction phase of the project. The construction of the marina will provide more than 800 jobs and, when completed, it will need 350 people to manage its operation.

The marina is expected to cost €220 million and will have a capacity of around 600 vessels, with a possibility of mooring large yachts up to 60 metres in length. The project will include residential and commercial developments, a hotel, restaurants, bars, cafes, boutiques along with administration offices for its management and operation.

When it’s completed in mid-2018 the marina will be declared official entry point to the Republic.

But the marina has not been without its critics.

A conservation group, Protection of the Natural Coastline, has questioned why the marina cannot be built next to the existing small harbour rather than in the heart of the Ayia Thekla-Liopetri Natura 2000 network, the destruction of which will be irreversible.

Some local residents and business owners are also concerned about the potential impact the new marina will have on the area’s prized beaches.

February property sales up five per cent

Nigel Howarth
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February property sales up five per cent

PROPERTY sales in Cyprus rose 5 per cent in February compared to the number sold in the same period last year following a 10 per cent increase in January.

During February a total of 325 contracts for the purchase of commercial and residential properties and land were deposited at Land Registry offices across Cyprus, up from 311 contracts deposited in February 2014.

Speaking to Stockwatch Solomon Kourouklides, the vice president of the Pancyprian Association of Real Estate Agents, said that he expects the increase in sales to continue in the months ahead.

Although sales fell in Nicosia by 35%, they increased in all the other districts.

In percentage terms, Famagusta performed best achieving 27 sales; an increase of 50% compared to the 18 sold during the same period last year and sales in Larnaca rose 42% to reach 71 compared with the 50 sold in February 2014.

Meanwhile, property sales in Paphos rose 8%, while those in Limassol rose 2%.

Cyprus-property-sales-Feb-2015

Year to date sales

During the first two months of 2015 total property sales reached 646; an increase of 7% on the 604 sales achieved during the first two months of 2014.

Larnaca saw the biggest increase of 58% with the number of contracts deposited rising to 161 from 102. In Famagusta sales increased 19% rising to 43 from 36, while in Limassol they increased 10% rising to 192 from 175.

However, the number of contracts deposited in Nicosia and Paphos fell 24% and 8% respectively.

Overseas transfer limit raised to €1 million

Nigel Howarth
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Overseas transfer limit raised to €1 million

Overseas transfer limit raisedTHE THIRTY FIFTH Decree on the enforcement of restrictive measures was published in the Cyprus Gazette early today, providing for an increase on the transfer of deposits outside the country from €50,000 to €1,000,000 a month.

However, the restrictive measure prohibiting the export of Euro notes and/or foreign currency notes in excess of €10,000/person/journey abroad (or the equivalent in foreign currency) remains in force.

Cyprus imposed capital restrictions in March 2013 to prevent a capital flight during an international bailout that saw one major bank shut down and another seize clients’ deposits to help it recapitalise.

The latest easing of the restrictive measures will be welcomed by those who have sold their homes and who wish to repatriate the proceeds from the sale.

The Decree will remain in force for 21 days starting on the 16th of March.

Last week the Governor of the Cyprus Central Bank Chrystalla Georghadji said that Cyprus expects to fully lift the capital controls before the end of the first quarter of this year.

Further reading

The Enforcement of Restrictive Measures on Transactions in case of Emergency Law of 2013 (unofficial translation).

Man hands home keys to bank

Nigel Howarth
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Man hands home keys to bankA DESPERATE home owner who could no longer afford to repay his loan walked into a branch of the Bank of Cyprus in Limassol earlier today and handed the keys of his house to bank employees.

The 35 year-old said that he was paying €350 a month for the repayment of his Swiss Franc loan but that the Bank had increased his monthly instalment to €900 abusing the terms of his loan agreement following the appreciation of the Swiss Franc against the Euro.

He added that he had decided to hand the keys of his apartment to the bank to avoid the proceedings and the hardship of repossession.

Around 100 people gathered outside the bank in solidarity with the man.

Green party MP George Perdikis who accompanied the man to the bank called for the write off of loan charges resulting from the inability of debtors to repay their loans.

Foreclosure protection for deed-less buyers

George Psyllides
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Foreclosure protection for deed-less buyers

Foreclosure protectionPARLIAMENT urged the government on Wednesday to find a solution for people who bought houses from insolvent developers without acquiring title deeds and who risk losing their properties even though they may have already paid for them in full.

The issue was raised during discussion of a bill tabled by main opposition AKEL to ban foreclosures in such cases.

“There is an emergency situation in the real estate market and people who meet their obligations are at risk,” AKEL MP Giorgos Loukaides said.

Many buyers are now in trouble as the crisis continues and property developers fold.

The developers’ land and buildings are counted as assets that need to be offset against their debt to banks, which gives lenders a claim on people’s properties that had been mortgaged by the developers even if the purchasers had paid the developer for them in full.

The banks readily lent to property developers, especially between 2004 and 2008, fuelling an unsustainable frenzy of activity which roughly tripled prices.

The outdated legal framework enabled property developers to sell on property that was already mortgaged.

Land registry official Charalambos Charalambous told MPs that issuing title deeds would not solve the problem since the developer’s mortgage takes precedent over that of a borrower.

A finance ministry official said a team of technocrats from the ministry, the Central Bank, and the land registry would assess the problem and the cost of these loans by the end of May.

She said the ministry was trying to find solutions but cautioned that AKEL’s bill provided an incentive to those who bought a house through a sales contract to never seek to acquire a title deed in an attempt to avoid foreclosure even where it might be warranted.

Editor’s comment

The Memorandum of Understanding (MoU) that has been agreed between the Cyprus government and the Troika of international lenders refers to this particular issue in Section C – ‘Legal framework for private debt restructuring’, paragraph 1.31. Namely:

The Task Force on registered, but untitled, land sales contracts will, by end-September, finalise a study assessing the magnitude of registered, but untitled, land sales contracts and underlying mortgages, in close cooperation with the working group reviewing the issuance of title deeds under the MoU provision 5.3. Based on this assessment and the recommendations developed so far, the Task Force will coordinate the work of the authorities involved and develop, by end-October, an action plan addressing at least,

(1) the removal of administrative hurdles for the transfer of title,

(2) the provision of tools to encourage the release of encumbrances on properties to facilitate title transfer, and

(3) the development of contractual standards for land sales contracts and connected loan and mortgage arrangements.

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