One of the main problems facing the construction sector in Cyprus is the lack of skilled labour, said Stefanos , Secretary General of the Cyprus Construction Contractors Association (OSEOK). Pieridis : In addition to the talent shortage, the industry also faces challenges related to the digital and environmental transformation that is necessary to maintain the competitiveness of companies.
Stefanos Pierides noted that the construction industry has shown stability this year with a slight increase in turnover. This growth is supported by both the state budget and the steady domestic demand for construction projects, which remains strong despite geopolitical difficulties.
Pierides stressed that a return of building material prices to pre-2020 levels is unlikely given the global energy crisis and unstable political situation that affects logistics. He noted that consumers should take current market conditions into account when planning their purchases.
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Development of the construction sector in 2024
Overall, the construction industry in Cyprus is showing steady growth, supported by the state budget and domestic demand. Foreign investors also continue to show interest in real estate, creating demand for office space, residential property for employees, as well as for the construction of new schools, universities and medical centers. Cyprus attracts both quality of life and safety, as well as a favorable tax system.
According to the Land Department, the number of applications for building permits and registration of property sales documents continues to increase in 2024. Although demand from local buyers has increased, foreign buyers are less active than last year.
Types of real estate in high demand
According to the Statistical Service, there has been an increase in demand for residential property, especially apartment buildings, over the past two years. In 2023, Cyprus recorded the highest increase in residential property transactions among EU countries – 31%, a record for the third year in a row. In the first half of 2024, the number of building permits increased by 17.1%, and in June this figure was 44.4%.
At the same time, while residential construction is growing strongly, the number of commercial projects, such as non-residential buildings, fell by 1.8%, due to the transfer of authority to issue building permits from municipalities to new regional governments.
The problem of labor shortage
One of the most serious problems for construction companies remains the lack of qualified personnel. This deficit affects not only organized companies, but also the entire supply chain – from contractors to suppliers. The lack of workers has led to an increase in illegal and undeclared employment, which creates conditions for unfair competition. OSEOK cooperates with the Ministry of Labor to solve this problem.
At the moment, the only solution is to attract labor from third countries, as local personnel cannot cover the current demand. In the long term, a change in both public perception and educational programs will be required to make a career in construction an attractive and prestigious profession with decent salaries and social guarantees.
Collective agreement and its meaning
The recently signed collective agreement in the construction industry will be in effect until 2028. This agreement will allow construction companies to plan their activities on a long-term basis and will also provide an opportunity to review the terms of the agreement for its modernization.
The signed collective agreement is an important step towards ensuring predictability and stability in the Cyprus construction industry, allowing companies to plan their work more effectively and adapt to new conditions.
Problems and suggestions
The path to digital and ecological transition is also one of the challenges of the time in which the industry must invest in order for the business to remain viable and competitive. It is especially important to implement technologies that support the principles of the circular economy and help reduce the impact on the environment.
In recent years, the requirements for environmental responsibility of companies have increased significantly, especially in the context of implementing ESG (environmental, social and corporate governance) standards. However, for small and medium-sized businesses, meeting all these requirements is becoming a difficult task. Therefore, it is advisable to adapt the standards to the capabilities of companies of different sizes, as is already being done in a number of countries.
In order to simplify bureaucratic procedures and speed up construction licensing processes, it is proposed to introduce the One system Stop Shop , which will allow you to obtain all the necessary documents and permits in one place. This will have a positive impact on both the construction sector itself and the country’s economy as a whole.
Construction industry and new requirements
There is a pressing need for continuous professional development as demand for professional staff continues to grow. In addition, contract standards for government projects need to be reformed. Proper planning, precise execution of tasks and ensuring liquidity remain important success factors. Failure to do so leads to project failure, as has happened with a number of large government projects involving foreign companies.
Proper financing and a long-term strategy will enable the construction sector to not only support but also enhance the country’s economic development.
Prices for building materials
The issue of prices for construction materials remains important for the industry. According to the Statistical Service, the price index for construction materials in August 2024 was 117.68 points, which is 0.03% higher than the previous month. The main decrease was observed in the category of metal products (-3.5%), while the cost of electromechanical goods and other categories continues to grow.
Although the price index has decreased by 0.08% compared to August 2023, it is difficult to predict further price declines due to global energy and political instability. Therefore, consumers should plan their purchases based on the current market situation and their own capabilities. Property prices, for example in Limassol , may gradually stabilize due to an increase in the supply of housing in the area.
Over the past few years, there has been an increase in interest in residential real estate, particularly in the construction of apartment buildings. This trend continues due to both domestic demand and interest from foreign investors.
