The construction sector in Cyprus is slowly but steadily making a comeback but with cost prices per square meter twice what they were during the real estate industry bubble, according to 2016 data released recently by the island’s Statistical Service.
Specifically, construction costs during the island’s real estate bubble were €747 per sq. metres but these reached a high of almost €1,000 per sq. metres after it burst. In the meantime, the construction industry recorded an annual growth from 2000 to 2012, but from 2013 to 2015 it recorded a contraction.
In demand seem to be apartments rather than houses and this is evident from the total area of each type of building. In 2016, the total cost for the construction of a house was €993 per sq. metres – €1,010 per sq. metres for houses and €910 per sq. metres for apartments. With the first signs of the real estate bubble, that is in 2005, and up until it burst, in early 2012, the cost of building a house was cheaper, according to the released data.
Specifically, the cost of building a home in 2005 was €702 per sq. metres but 11 years later this increased by 41.45%. In fact, the total area of a dwelling in 2005 was 2.47 million square meters, compared to 2016 when this dropped by 75%. In 2006, when the real estate was booming, the area of dwellings remained at the same level and the cost per square rose to €747 per sq. metres. In 2008, the area of houses increased to 2.75 million sq. metres and the cost per square rose to €808.
Compared to 2016, the cost of building a house is higher by 23%. In 2009, when construction activity was high, the total area of dwellings amounted to 2.55 million sq. metres with construction costs per square metre at €842. In 2010, the total area of houses was 2.11 million sq. m. and the construction cost €869. But in 2011, the construction industry’s fatigue began to show.
The total area in residential projects dropped to 1.60 million sq. metres, but the cost increased to €899 per sq. metres. In 2011, when real estate problems became more prominent, the total area of houses fell to 1.16 million sq. metres. But the cost per square meter rose to €929.
And in 2013, a year that marked negatively Cyprus’ economic history, the total area of houses fell substantially and from millions it went down to thousands. However, this was not the case with construction costs, which rose by 2.15% within a year, reaching €949 per sq. metres.