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Continued decline in building permits

Cyprus construction activity continued to decline in May as building permit numbers fell once again compared with the same period last year, according to the latest figures from the Cyprus Statistical Service.

THE NUMBER of building permits issued in May 2012 stood at 618 compared with the 691 issued in May last year; a decrease of 10.6%, according to the latest figures released by the Cyprus Statistical Service.

Compared with May 2011 the total area of these building permits fell from 180,882 square metres to 134,085 square metres (-26%) and their value fell from €173 million to €127 million (-27%).

During May, building permits were issued for:

  • Residential buildings – 401 permits
  • Non-residential buildings – 95 permits
  • Civil engineering projects – 74 permits
  • Division of plots of land – 42 permits
  • Road construction – 6 permit

During the period January – May 2012, 3,114 building permits were issued; a decrease of 6.4% compared to the same period last year, while the total value of these permits fell by 30.1% and their total area fell by 33.9%.

New home construction

The 401 residential building permits that were approved in May provided for the construction of 459 new homes comprising 236 single houses and 223 multiple housing units (such as apartments and other residential complexes).

This is a fall of 33% compared with May 2011 when building permits were issued for the construction of 686 new homes.

Cyprus new home construction May 2012

Source: Cyprus Statistical Service

During the first five months of 2012, the number of new homes for which permits have been issued has dropped 42.3% compared with the same period last year.

According to the Cyprus Statistical Service, building permits constitute a leading indicator of future activity in the construction sector.

Readers' comments

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  • Costas Apacket says:

    Nigel, Thank you just checking because the figures were not what I expected.

  • @Costas Apacket – Please read my earlier comment.

    (Latest figures on sales contracts lodged at Property sales plunge to new depths).

  • Costas Apacket says:

    Nigel, Thank you for the link.

    Are these figures for actual transfers of Title or for planning applications / Sales Contracts lodged?

  • @Costas Apacket – The Department of Lands and Surveys publishes monthly statistics on the number of transfers.

    Incidentally, the Planning Offices take no part in the transfers.

  • Costas Apacket says:

    Are there any figures to suggest that the District Lands and Planning Offices are using the significant lull in the submission of building permits to increase the transfers of individual Title Deeds to hard pressed ‘property owners’?

  • Mr Holland says:

    Nigel

    For this I am grateful, although I am already aware, but nonetheless appreciate your input and suggestion.

    “If you are planning to build environmentally friendly homes in Cyprus, I have given you advice and information that will help to make your business a success. Whether you are prepared to accept that advice and act accordingly is entirely up to you”.

    Thank you

    Mr Holland

  • @Mr Holland – NO, I didn’t say:

    “Until such time as a secure and reliable means of purchasing off-plan properties and a reliable means of transferring those properties to their purchasers is put in place by the government, you are advised not buy property in Cyprus unless it has a full Title Deed.”

    If you read my comment properly, you will see this advice came from the Foreign and Commonwealth Office.

    If you want to read the original source, you can find it on the Foreign & Commonwealth’s website at Buying property in Cyprus

    If you disagree with this advice, I suggest that you take the matter up with the Foreign & Commonwealth Office. Here are some contacts for you:

    Charles Hay – Director of Consular Services
    Simon Horner – Consular Regional Director
    Beverley Lewis OBE – Regional Consul for Greece & Cyprus (based in Greece & Cyprus)

    If you are planning to build environmentally friendly homes in Cyprus, I have given you advice and information that will help to make your business a success. Whether you are prepared to accept that advice and act accordingly is entirely up to you.

  • Mr Holland says:

    You said :

    “Until such time as a secure and reliable means of purchasing off-plan properties and a reliable means of transferring those properties to their purchasers is put in place by the government, you are advised not buy property in Cyprus unless it has a full Title Deed.”

    I SAY NO MORE !!!!!!!!!!!

    for a few hours any way

    HOLLAND is watching you !

  • Simon Edwards says:

    Mr Holland Anti-Cypriot investment is exactly what various pressure groups are creating. It is their intention not some secondary effect. After all legal avenues were exhausted I believe it was their only method of getting change. I’m afraid all your other ideas and clever thinking are skirting the problem. It’s simple title deed at point of sale or no sale! Can it be so hard that all the other countries in the world (i think) operate this way.

  • @Mr Holland – no-one is advocating “stopping construction”.

    As for “Legal guarantees that it (title deed) will come in due course” – all contracts contain such a clause – and look at the mess the industry has created for itself by failing to honour these guarantees – 130,00 properties without deeds!

    As I mentioned earlier, it is very easy to get Title Deeds issued. All you need to do is subdivide the land into individual plots, lay in the roads, pavements and utilities and get a Title Deed issued for each of the plots.

    Purchasers would then have two contracts – one for purchasing the plot (and as it’s Title Deed would be available, ownership can be transferred to the buyer on full payment). A second contract would be for the construction of a house on that plot of land and updating the Title.

    This isn’t rocket science – some developers already do this.

  • Mr Holland says:

    TO ALL

    Yes I agree …BUT

    IMMEDIATE HOME OWNERSHIP IS NOT THE ONLY ANSWER AND WHAT YOU ARE DOING IS SIMPLY IS CREATING, in my opinion, ANTI CYPRUS INVESTMENT ….stopping construction is not the answer …resolving the Title Deed issue is.

    In the meantime if required, developers should build and rent to expats et al… making the Title Deed Fiasco more bearable until resolution…

    and I agree your suggestions on here are the only real answer…Title Deed upon deleivery and completion.

    So.. .one of many solutions

    Purchser agrees to buy property with no Deed with Legal guarantees that it will come in due course.

    Purchaser pays just construction costs plus 10%-20% and then rents the property from the developer until deeds arrive. All rental payments are taken into consideration at the issue of the deeds arrival and ownership takes place thereafter.

    And many, many ideas similar could be introduced, with the will and some thought.

    This type of thinking could kick start the construction industy and stop the overall negative outlook by many stopping buyers from settling in Cyprus.

    Rembember, moving into a new home is one of the most stressful activities on the planet…apprarently ??…so why do it more than you need to…

    Renting per se is the answer for some but not all.

    Cyprus is still the best and safest, in all other respects,of the Meditteranean Islands….bar none.

    So surely we should think of innovative and creative ideas that are possible rather than scaring the new wave of buyers to death !!!!!!!!!!

    Holland…looking to the future …not moaning about the past

  • @Mr Holland – I recommend to everyone that they should take heed of the advice issued by the Foreign & Commonwealth Office:

    “The British High Commission advises potential purchasers to exercise extreme caution when buying a property if the title deeds are not readily available, as to do so means that your property could be at risk.”

  • Simon Edwards says:

    Janner I concur. One option only, deeds available at point of sale. I definitely wouldn’t gamble on imminent or anything else. Mr Holland I am afraid people were left with no choice but to advise against investment in Cyprus it was the last possible route to get things changed.

  • Janner says:

    Mr Holland,

    A transparent and sensible conveyancing process is all that is required, such as the one in the UK.

    Any other system is a load of nonsense!

  • Mr Holland says:

    Dear Nigel

    I find the personal guarantee route a bit extreme, but can see how like this are possible to protect the purchaser.

    My point about disgruntled expats and all others who buy property is that we all have a choice to sign a contract and if it does not suit we should not sign it.

    The Banks and the developers to a large extent got away with it because they we aided by the solicitors who were on the wrong side .

    Anyway..thank you for your input as those suggestions give assistance to the new wave of buyers if do not resolve the problems for the old ones.

    It certainly is much more constructive than saying if the issues in Cyprus are not resolved we advise against investment in property in Cyprus per se.

    Holland

  • Janner says:

    If a property is built without a permit and this is illegal, why on earth would a bank provide a loan for something that was built illegally?

    Why would a lawyer allow the completion of the deal if the property is illegal?

    When the word ‘illegal’ is used in Cyprus does this mean criminal or civil breaches? If it is criminal then law enforcement agencies would be dealing with the breach surely.

    I also think it would be quite funny if a government agency was housed in a property which itself is illegal due to having no building permit!

    Does nobody in the Cypriot government want to address these very serious issues? Why will they not just answer the questions?

  • @Mr Holland – there are ways to overcome many of the problems should a developer retire or close their business.

    One thing buyers can do is to get their developer to sign an agreement stating that he is personally responsible for the performance of the contract and the structure.

    (My building contractor was persuaded to sign such an agreement that was drawn up by my lawyer).

    One of the issues that people occasionally come across is that developers will set up a small company to construct a single development. Once the development has been completed and Title Deeds issued, the small company is left with no assets and is closed down.

    There is a case I know of in Paphos, where a large developer did exactly this. However, one of the buyers realised what was happening and refused to transfer the property and get the deeds. As a consequence, the company is still very much alive and buyers have been seeking a solution to the structural issues on their properties that started to appear in 1990.

  • Mr Holland says:

    Thank you Nigel….and obviously I agree.

    As for Lifetime guarantees this is again my thinking and understanding …

    But the developers may retire, die or close their business for all sorts of reasons other than bad ones, at which point the insurance they offered no longer exists.

    So lets be realistic 10 YEARS is still 5 times what buyers in Cyprus had been use to and in some cases 10 times.

    Going bck to my efforts to improve construction

    We will have written proof re performance for :

    Energy values
    Termite ,
    earthquake
    and heat resistance and burn time
    etc…to more than comply with any standard required for the Cyprus Market

  • @Robert Briggs – Do not sign away your statutory rights by agreeing to a 10 year structural warranty. New property in Cyprus has a lifetime warranty against structural defects – but it is up to the purchaser to demonstrate that the problem results from poor materials/workmanship on the part of the developer.

    In addition, a developer can take out insurance offering a 10-year warranty against hidden (latent) defects – see Construction quality of new homes set to improve.

    As for Title Deeds, the most effective way of securing ownership is for the developer to subdivide the land on which he is building into building plots (complete with pavements, roads and utilities) and get Title Deeds issued for each of them. Buyers would then have two contracts:

    The first contract would be for the purchase of the land.

    The second contract would be for the construction of the property and getting it added to the Title Deed.

    Once a purchaser had paid in full for the land, ownership could be transferred immediately thereby securing the land and anything built on it in their name. (The Property Transfer Fees will also be lower as they will be based on the price paid for the land alone, rather than the land plus the property).

    Once the construction of the property has been completed and it’s been inspected and issued with a Certificate of Final Approval, it’s a simple process for the developer to get the property added to the deed – in my case, it took a year.

    A number of developers carry out their projects this way.

  • Mr Holland says:

    Robert Briggs

    The problem in Cyprus is not just the Title Deed issue, which is obvious and very damaging, but inadequate contracts that are drawn up by some of the poorer quality solicitors who worked mainly, or did , for the Banks and the developer.

    Now, my Lawyer is somewhat different. He refuses to act if it’s simply not right for all parties within the transaction.I mean refuses !

    I wish not to make a real performance of your questions, although I could.Other than to say it is what you would like the contract to do for you interms of protection that is of paramount importance.Naturally it is difficult within this forum to expand.

    However…if you received this below from a lawyer and a 10 year structural guarantee… insurance based or otherwise….would this satisfy your requirements ?

    Title deed disclaimer in accordance with latest eu directive and current republic of Cyprus legislation.

    Legislation 46(i)2011 provides, through its wisdom, temporary measures giving the opportunity to whom it may really concern to take action to legalise their investment, by taking certain action that will lead to success, i.e. Issue of the title deeds. Temporary measures are taken to safeguard previous investors that cannot take advantage of the new legislation. Within time the temporary measures will give way to the new legislation which is already in action. The purchaser has now a vital role to play on the issue of the deeds and we do identify where the investors have taken those steps to capitalise on this legislation.
    We as a company , with the assistance of our legal team perform due diligence on every property and make sure that the issue of the title deed will be in accordance with the above legislation.

    We can assure our clients that they will know before they invest in a specific property the status of the title deeds. We will confirm to the investors one of the following :

    1. There is a separate title deed issued for the property they are interested.the title deed document is therefore now available with the vendor or solicitor.

    2. The title deed is imminent. That means that there is certificate of final approval (which clearly means that the next step is the issue of the title deed.)

    3. The certificate of final approval is about to be issued and/or the developer went through the amnesty application, the report from the architect clearly states that the clients will get the title deed. Next step is the certificate of final approval.

    4. We will not ever promote any properties that will never get title deeds!

    5. All investors will get a search from local district land registry identifying that there is no loan on the land.

    1. All investors will get a bank waiver in the remote case that there is a loan on the land, securing that their property is exempted from any encumbrances and/or bank loans.

    Holland

  • Robert Briggs says:

    @ Mr Holland, are you prepared to offer full complete and genuine Title Deeds ( without any incumberences / covert developer mortgages, ad nauseum,) + 10 year structural guarantees with these properties? Please let me know. R.B.

  • Mr Holland says:

    Mr Davis and Mr Edwards…at last we have debate. Sensible, constructive, positives and negatives. How civil.

    I need to make myself clear I suppose ….as my banter is often only left here to rile the sceptics although all I say is factual where it is not just my opinion.

    To be fair there is some great use of concrete and stone …just not from the bigger developers in the main.

    The smaller/medium ones can have some great ideas and I have seen some excellent builds…just not enough.

    Timber framed needs not be Timber clad.It can be clad in anything any size, any colour and any material that is free from the stuff we do not want and that is sustainalble. Hundreds of options …as for termites and heat and cold our extrnal cladding system and laminated logs and all other precautions remove the dangers others have to fight with.

    20 years experience helps at the factory …Grand Designs have used them…so they know what they are doing.

    The wooden village below you is possible full of 200-250 sqm houses all too expensive and wromg time wrong style and wrong price in possibly the wrong area…but that really is being harsh without knowing what or where they are.

    First time buyers, holiday homes with real rental value, micro -eco villages without tree hugging, low cost low energy and even Passive Haus if need be. Just a more sympathetic way to construct.

    Just ideas, designs and styles in small patches around Cyprus that make a difference.

    I am not trying to create a Timber revolution in someone elses back garden ..just give an option or 10 to those that see the future a bit sooner than others.

    There is no harm in trying to make things better !

    Simon…the loft cube is amazing..a prime example of how different things can be. Thanks for the link.

    Here’s one I like…I see these small developments as permanent or rentals with exceptional returns if located correctly…Any views warmly welcomed

    http://www.ecocottagescornwall.co.uk/

    Mr Holland…not selling just discussing and consulting

  • Simon Edwards says:

    Mr Holland Eco-Man I salute your enthusiasm I sincerely hope you succeed where others have failed. I am an architect working in Cyprus specializing in illustration. You are correct about aesthetics here in Cyprus. However timber framed construction has been tried and still exists here. Often Bulgarian crews arrive & prepare the slab and then assemble the house. To be honest I am not a fan of the traditional Swiss style log cabin aesthetic either. I think pre-fabricated housing may be a viable solution. The tolerances, quality, and construction time are excellent. Plus the hassle factor is greatly reduced. Pre-fab’s are made indoors so have very little waste and efficiency is high. However sheer mass is always a winner for this climate. It’s been tried and tested over centuries. For example go to Kolossi castle and feel how cool it is inside, thick walls and small openings are the way to go in an ideal situation. The sheer mass of the structure works in your favour. Have a look at some pre fab links if you like:

    http://www.fabprefab.com
    http://www.loftcube.net

    I particularly like the idea of assembling a series of loft cubes elevated on legs in a mature wooded site ! The hassle factor is excellent with good preparation, the house is sealed and ready to go often with days rather than months.

  • Peter G Davis says:

    Actually Mr Holland is right in part. I’m always impressed with the churches in Cyprus. The big churches are built with style and show a class that is equal to any stonemason around the world.

    So why I ask is my concrete house built like a square box with all the charm of a garage shed?

    Below my house stands a complete estate of wooden house, (all empty, not a single one sold). I thought they would be better than my concrete structure, but with solid filled foam walls they’re colder in winter and hotter in summer.

    And the retaining wooden structures I put into my garden only last year to hold back soil are finished, completely eaten away by termites.

    My daughter who lives in Australia has a pressurized chemical loop around the house set into the soil about 12″ deep which is topped up and checked as part of the annual insurance requirements. Nothing grows within 2′ of the house. There is nothing like that on the estate below me. So you can see how they will go.

  • Mr Holland says:

    Nigel …what absolute nonsense and a prime example how the years and construction methods have passed you by.

    Aesthetically Cyprus builds IN THE MAIN, ARE DREADFUL.

    Concrete and steel is not stronger or more equipt to deal with earthquakes and termites are not a problenm as the our timber and logs are treated.

    Just because it has not worked for others because they know not what they are doing, does not mean that it will not work for me or my associates.

    My colleagues have forgotten much of what Cypriot construction knows with the exception of J&P and similar.

    Move on mate…your comments are exactly what is wrong…do what you always do and get what you always get…..so says Eco-Man

    Holland …always 2 years ahead

  • Dunn Good says:

    My wife and I bought an apartment in Chloraka in `04 finished in June `05. In `10 we had so much paint and plaster coming off the walls in all rooms it took us a week to strip plaster and paint. Now `12 there are cracks in walls damp peeling paint again in the same places. We have replaced stop cocks, lift valves, water pumps, a/c parts. The list goes on, no wonder the developers won`t offer a 10 year guarantee as in the U.K. A 25 year mortgage would leave you with a pile of rubble.

  • @Mr Holland – the reason homes are not selling has nothing whatsoever to do with construction techniques.

    The lack of sales, as you may have read elsewhere is due to the uncertainty in the market and the recession and of course the ‘crooks’ masquerading as ‘honest’ property developers and lawyers.

    As for timber/timber frame homes – I started my professional career in a company that specialised in timber preservatives (it’s expertise was used to preserve the Vasa – the Swedish warship that capsized 1628).

    Australia has very stringent conditions regarding timber used for construction – Cyprus has none! You can bring any rubbish into the country and use it for building.

    Termites and other wood-eating pests are a growing problem in Cyprus and while an EU committee has put Cyprus in the red zone for termites, the government is lagging behind the rest of Europe in terms of legislation – it has none.

    Also the cost of insuring a timber/timber frame building in Cyprus is significantly more than one built with a reinforced concrete frame and brick infill due to the increased risk of fire.

  • @Mark – I appreciate your problem. My architect had to chase the planners to get our building permit – but it didn’t take a year!

    In addition, some developers apply for building permits retrospectively; i.e. When the property/development has been built – and some do not apply for permits full stop.

    Although building without a permit is illegal, few seem to bother and the authorities appear unable or unwilling to enforce the law.

    This disregard of the law and its lack of enforcement has contributed to the massive number of properties (130,000) that have yet to be issued with Title Deeds. As you may be aware, the latest Town Planning Amnesty is yet another attempt by government to legitimise some of these properties so that they can be issued with Certificates of Final Approval – a necessary precursor in getting their Title Deeds issued.

    All we can really read into these latest figures is that investment in construction is continuing to fall.

  • Odd_Job_Bob says:

    Mark Lewis,

    With the greatest respect (yeah, yeah, we all know what that means really. Sorry!) but if you are still looking at buying or developing property in Cyprus, you are seriously not getting it.

    Even the Remarkable (What colour is the sky in the planet you’re from?) Mr Holland acknowledges the huge amounts of unsold (and unsellable) property in Cyprus and that at some stage, the market (or whatever word you’d use to describe the economic wasteland that the post crippling and vicious EU imposed and mostly ignored measures will leave in its wake)will be flooded with repossessions. That’s if the banks can afford to repossess…

    Unless you plan to stay in Cyprus come hell or highwater, then investing any money in the place is worse than placing an each-way bet on a three legged rocking horse to win the 3.30 at Kempton.

    And that’s even if you do have title deeds.

  • Costas Apacket says:

    Mark, out of interest, was your application paperwork completed in English and signed by yourself or was it submitted in Greek signed by your Cypriot Architect?

  • Mike says:

    Mark – Sentiments agreed, I have been trying to get permits of one kind and another for years and just get pushed from pillar to post, office to office, one authority to another. It appears to me to be very much like the Middle East and Africa of the early 70’s when everyone and their dog was an official with a rubber stamp and needed to have their stamp of authority on every piece of paper imaginable with the result that no one has overall authority, responsibility or control. Is it any wonder people just go ahead and build which is then classed as illegal.

    Mr Holland – Point taken but we should be careful what we wish for lest we lose the character of the place which is what drew us to it in the first place. I despair at the multi million Euro modern monstrosities being thrown up at the moment to cater for the bling brigade of the former Soviet states. Some are just hideous. I for one, perhaps in a minority, am a traditionalist. As for the re-bar protruding I think you will find that is a tax choice as the place is unfinished therefore cannot command fees. The rest of your point is totally valid and a little environmental clean up and landscaping goes a long way to ensuring a pleasant environment for all. Aphrodite Hills being a typical and perfect example of that save for some of the house designs.

  • Mark Lewis says:

    I have been waiting for my building permit for over a year. If it takes this long to process applications these figures are definitely a “lag” indicator and perhaps if I am not alone there are plenty in the system but they are just not capable of processing them. I would hate to think how long it would take if they were busy

  • Mr Holland says:

    it’s no wonder they are down …

    yes sir we can build it exactly how you want it.

    Providing It’s Cream, beige or white and our architect will design a contemporay style with steels out the top, a beautiful huge water tank, massive electric bills and unfinished roads and lanscapes all made with the finest carbon sucking concrete and put onto paper to the planners with just one 12 inch ruler and black pen.

    And that my friends is more than enough reason to wake up and start to build it differently and why so many properties are left unsold.Once the plasma/lcd tv came in after a few years you could’nt give a old fashioned tv away.

    So they all ended up in the 3 star hotels of Cyprus

    Well at least my realism is worth a read !

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