Israelis are setting the direction of the Cyprus property market

The difficult situation in Israel and the impact it may have on the economy and citizens of neighbouring countries will, to some extent, affect the progress of the construction industry in Cyprus.

This is the conclusion of Stelios Gavriel, head of the Federation of Associations of Building Contractors of Cyprus (OSEOK).

In particular, he noted that Israeli investors have been the second largest group of property buyers in recent years, after Russians.

Gavriil mentioned that about 45% of property transactions are with foreigners. This shows how important they, including Israelis, are to the Cyprus property market.

He also mentioned investors from Israel, who have been particularly fond of Cyprus in recent years. According to Gavriel, the fighting in Gaza has caused caution among the country's citizens, who seem to be adopting a wait-and-see attitude about their next steps. This situation affects the short-term horizon. In the medium to long term, the head of the association believes that Israelis will see Cyprus as a safe haven for residential and commercial property investments.

The head of the association also revealed that the market has recorded growth in 2023. However, data on building permits suggest that there will be a slight downturn in 2024. It is important to see how the market develops over the next 2-3 months in order to draw more accurate conclusions.

In addition to the above, Gavriel also touched on the domestic market, noting that it can continue on its development path, but it is worth taking into account the fact that Cyprus, like a significant number of other countries, is experiencing a downturn in the construction sector. High interest rates and the rising cost of raw materials have created a difficult situation in several markets and, as a result, the construction industry is experiencing a downturn.

It should be recalled that, according to the latest data from Statistics, the construction materials price index for March 2024 reached 117.19 units, an increase of 0.21 per cent compared to the previous month.

Compared to the corresponding month of 2023, the index decreased by 1.7 per cent. For the period January-March 2024, the index recorded a decrease of 2.05 per cent compared to the corresponding period of 2023.

Regarding building permits, the statistical office reported that the number of permits issued by municipal and provincial governments reached 587 in January 2024. The total value of these permits reached 221.3 million euros and the total area reached 198.2 thousand m2. On the basis of these permits, 834 residential units will be built. In comparison with the same month of last year, the number of building permits issued decreased by 0.5%. The total value of these permits decreased by 8.3% and the total area by 2.4%. The number of dwellings fell by 11.1%.