CYPRUS: Invest citizenship scheme is good news for construction sector

Cyprus’ investment for passport scheme has lifted the construction sector out of recession, triggering growth and jobs as multi-storey high-rises change the urban landscape.

Chairman of the Cyprus Building Constractors Association (OSEOK) Costas Roushias told Stockwatch, that the passport scheme had helped the construction sector to come out of the stagnation it had found itself in, putting several developers back on their feet.

He said during the period 2009 to 2014 the sector was continuously shrinking, as the crisis had a negative impact on major construction companies with investment in the industry significantly reduced.

The scheme has also opened up new jobs in several professions and Roushias said the scheme should be applied wisely and in a targeted manner, limiting uncontrolled construction.

Employment in the construction sector has been gradually recovering since 2015, partly due to foreign investor interest. Cumulatively in the period 2016-2018, investments made within the scheme’s framework led to the creation of 2,000 jobs, increasing employment in the sector by about 8%.

Roushia’s comments are supported by a number of economic indicators which have recorded the rapid growth in the construction industry following the recession.

The construction sector was the main beneficiary of investments made by foreigners participating in the passport scheme, Finance Minister Harris Georgiades has recently admitted.

According to a study by the finance ministry, investment in construction accounts for more than 50% of all investments made through the naturalization programme for 2013-2018. Meanwhile, the share of investments made in the real estate/construction sector as a result of the scheme, has increased significantly to 37.7% in 2018 compared to 19.5% in 2015.

According to the latest available data, the volume of projects in the construction sector recorded an increase of 24.4% in 2018 compared to the previous year.

Projects acquiring building permits, have been increasing in recent years at a particularly high rate. In 2018, permits for area covered have increased by 27% compared to the previous year and doubled within four years.

Sales of real estate increased by 6% in 2018, while real estate prices also rose. In 2013, real estate sales were down 40%, while prices fell 8.7% compared to the previous year.

In 2018, 580 passports were issued to foreign investors, compared to 503 in 2017 and 425 in 2016.

A total of Euros 6.6 bln was generated by the invest citizenship scheme since 2013.

Source: The Financial Mirror