Cyprus’s construction sector continues to play a key role in the country’s economic development, while simultaneously facing the need for large-scale reforms and addressing housing affordability. These issues were the central themes of speeches at the 31st General Assembly of the Cyprus Federation of Building Contractors’ Associations (OSEOK), held in Nicosia.
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Simplifying licensing and reducing approval times
Reform of the construction project licensing system has been identified as a priority area of state policy. A new model for expedited application review has been introduced for low- and medium-risk projects, which account for approximately half of all permits.
The updated approach includes a significant reduction in bureaucratic procedures and the digitalization of processes. The timeframes for issuing urban planning and construction permits have been reduced to :
- 40 working days – for one- and two-family houses;
- 80 working days – for multi-apartment buildings with up to 20 apartments.
Since the introduction of the new system, more than 1,400 applications for the construction of private and semi-detached houses, as well as approximately 260 applications for the construction of apartment buildings with up to 20 apartments and residential complexes with up to 12 buildings in a row, have been reviewed in an expedited manner within the established deadlines.
A gradual improvement in the situation with delays in issuing permits by district local governments has also been noted.
Measures to resolve the housing issue
Particular attention is paid to the issue of affordability of residential real estate. Key tools include Urban Development Initiative Plans and the “Build to Rent” program. Under this scheme, developers are granted an additional development coefficient of up to 45%, provided that some of the properties built are offered at affordable prices for purchase or rent.
These initiatives are expected to result in the construction of approximately 1,500 residential units over the next two years, at least 250 of which will be affordable.
Cyprus’s housing policy is developing in line with pan-European policy. The European Commission plans to present a pan-European affordable housing strategy in the near future. The Government of the Republic of Cyprus, preparing for its Presidency of the Council of the European Union, intends to actively participate in the development of a unified approach to housing issues at the EU level.
The economic importance of the construction industry
OSEOK President Stelios Gavriil emphasized the significant contribution of the construction industry to the country’s economy. Contractors account for approximately 12% of the gross domestic product, 6% of which comes directly from construction activities. Contractors create over 43,000 jobs for technical and creative professionals. There are approximately 2,500 contractors registered with OSEOK.
Personnel shortage and the need for structural changes
Labor shortages remain a systemic problem. The need to develop a long-term strategy focused on the industry’s actual needs, simplify procedures for attracting specialists from third countries, and consider transnational agreements with countries that possess qualified personnel was noted. The urgency of modernizing the Contractors’ Council was also emphasized.
Quality, transparency and government contracts
During the assembly, calls were made for the implementation of modern approaches in the public project implementation chain. The importance of transparency, impartiality, speed of decision-making, and adherence to high quality standards was emphasized.
The current rules for concluding government contracts sparked a separate debate. It was noted that a healthy and competitive environment is essential for the successful implementation of infrastructure projects.
Construction as an economic driver
President of the Cyprus Federation of Employers and Industrialists (OEB), George Pantelidis, represented by Vice President Demetris Vakis, described the construction industry as one of the main drivers of the Cypriot economy. The active development of residential real estate, infrastructure projects, and related sectors continues to have a direct impact on the stability and growth of the Cypriot national economy.
