Soaring building costs shackle recovery

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Cyprus real estate and construction sectors are stressed from skyrocketing prices of building materials, making it harder to recover from the pandemic and scrapping of the ‘golden passports’ scheme.

According to the Cyprus Statistical Services data, increases were recorded across the board in 2021, pushing up the overall construction cost by 10.98%, compared to 2020.

Compared to the pre-coronavirus year 2019, the overall building cost has gone up by 10.51%.

Essential items such as steel, cement, sand, stone aggregates, and wood-based materials have recently seen a significant price increase.

According to CyStat, building materials with the largest increase is construction steel, with prices rising by a whopping 46.56% last year, compared to 2020.

Iron rod prices jumped 33.39%, while copper pipes recorded an increase of 44.34%, and steel pipes increased 32.69%.

The iron railings price increased by 30.28%, structural mesh by 27.06%, paving asphalt by 26.54%, and cables 24.64%.

The increases are attributed largely to the deregulation of the production chain, the restriction of exports from China, the absorption of large quantities of raw materials from the Chinese market.

High oil prices have also inevitably led to an increase in the cost of commodity prices, such as structural steel, copper, and metals.

The price index of construction materials for December 2021 rose to 119.66 points, marking an increase of 0.63% compared to the previous month.

Compared to December 2020, the index recorded an increase of 17.10%.

A comparison of the data of 2021 with both 2020 and 2019 shows that building material prices have remained high.

To cost of materials for sheds and roofs, metal parts for plasterboard and cement board installation have also gone through the roof.

The average cost increased by 23% in 2021 compared to 2020 and 2019.

Regarding electrical materials, the largest increase of 24.63% was recorded in the category of cables.

Prices of sockets, switches, fuses, and insulators increased by 10.32%, while lamp prices remained stable.

Prices for heating and cooling materials did not change much.

The average price of burners and boilers increased by 3.27% in 2021 compared to 2020; central heaters increased by 5.6%, the prices of air conditioners decreased by 3.78% from 2020, while building a fireplace was 5.11% more expensive in 2021.

Prices for water tanks remained stable, while prices for plastic pipes increased by 14.80%.