The Cyprus housing market has become unaffordable for many due to the rising cost of construction materials. Industry insiders warn that this will not be resolved for quite some time.

“Developers are willing to absorb some of the additional cost of construction materials but part of it will inevitably be passed onto the buyers,” Cybarco CEO Michalis Hadjipanayiotou told Cypriot outlet Stockwatch.

Referring to the recent rise in construction material prices and how this followed a short period of stabilisation, Hadjipanayiotou said that this will affect the potential discount new buyers might be able to receive.

“After this recent development, we are at least trying to preserve prices at their current levels by decreasing the potential discount we provide on new properties from the usual 10 per cent to 5 per cent,” Hadjipanayiotou explained.

Some of the reasons for the rise in material costs include the surprising endurance of the worldwide construction market which has resulted in a continuous demand for construction material. However, the ceaseless demand has coincided with broken or disrupted global supply chains and inflated freight and transport costs. A second side effect of this has been the inability of retailers and wholesalers to keep their inventories stocked, resulting in higher prices due to excess demand.

Meanwhile, the Building Contractors Associations of Cyprus (Oseok) has asked the state to take a more active role and help regulate the market.

“The government is asked to take an overseeing role and cover for any ramifications, including the launching of smaller and larger construction projects so that job positions in the construction industry are preserved,” Oseok president Stylianos Gabriel told IN Business News.

“In the event where countermeasures are not taken, then we expect that the cost of new construction projects will rise by 15 to 20 per cent from September onwards, preventing any potential buyers from going ahead with buying properties,” Gabriel added.

Gabriel also called on the lowering of the price of existing properties so that the entire construction market is rejuvenated and new investors are presented with more appealing opportunities.