According to new data released by the Cyprus Statistical Service on Tuesday 18th June, the prices of construction materials in Cyprus have started to gradually decline.
Thus, in May 2024, the price index of construction materials reached 117.35 points (based on 2015 = 100), down by 0.11 per cent compared to the previous month and by 1.32 per cent compared to the same month in 2023.
As a reminder, the price index for construction products reflects the change in prices for the construction of objects of different types of economic activity.
At the same time, the cost of metal products decreased the most in May 2024. The price of this category fell by 6.68%. On the other hand, there was an increase in the prices of electromechanical products (+3.24%), minerals (+0.49%), wood products, insulating materials, chemicals and plastics (+0.3%), mineral products (+0.49%).
In turn, for the period January-May 2024, the index recorded a fall of 1.81% compared to the corresponding period of 2023.
It should be remembered that a fall or rise in the price of building materials in Cyprus has a direct impact on the value of property.
Usually, the additional costs resulting from the increase in the cost of building materials are borne by the buyers. As a result, buyers end up paying more than the amount originally agreed with the developer. However, there are cases where signed contracts oblige the developer to bear the additional cost of materials himself and not to pass it on to the buyers.
The continuing rise in the cost of building materials is also affecting the mortgage loans of individuals and legal entities. In many cases, the money secured by construction loans turns out to be insufficient: all initial estimates have changed fundamentally. Borrowers are forced to go back to the bank to ask for an increase in the original loan amount. Banks scrutinise all cases of borrowers returning to them, trying to determine whether the client will be able to withstand the additional financial burden and even larger loans.