Cyprus property developers appear to shift strategy

Value of permits up for third straight month

The number of building permits authorised in Cyprus fell for the 11th straight month in August, but the value of permits authorised was up.
The total number of permits was 504, 9.7% lower than August 2007. Building permits in January – August 2008 fell by 12.7% compared with the same period of 2007, to 5,613.
A different pattern was seen in terms of value, however. The total value of permits in August reached EUR 151.3 mln. This was 1.5% higher than in August 2007 and was the third consecutive month of increase.
The total area authorised fell by 1.9% in August and 7.4% in January-August.
The total number of dwellings fell by 22.7% in August and 9.5% in January-August.
These trends suggest that developers are shifting strategy to building a smaller number of higher value properties.
This is no doubt in response to weak demand from the UK mass middle market.
But whether this is a wise move when the well paid bankers and Russians have been the first to be hit by the global financial crisis remains to be seen.

Fiona Mullen
www.sapientaeconomics.com