In recent years, housing costs have become very high. The "slap" of the coronavirus left cracks in both the health system and the economy, bringing about increases in raw materials. The construction sector was one of the first sectors to be affected as significant increases were seen.
The war in Ukraine and the sanctions against Russia have come to add an additional burden on the consumer. Increases are now being seen in many essential goods as well with concern among citizens about where accuracy may reach intensifying. Young couples and those wishing to buy a home are having second thoughts as prices on building materials have gone up several times in a short period of time.
It is estimated that there is about a 30% increase in property prices, Leonidas Paschalidis, Deputy Secretary General of the KEBE told the Cyprus Times, saying that property prices have shot up.
"We have an additional rise in the prices of construction materials. The supply chain problems started slowly after we came out of the tight restrictive measures. The increases in these items have seen a big spike though because of the war in Ukraine as well, where the whole supply chain and construction materials have been affected. We estimate that there is about a 30% increase due to increased costs."
Therefore, Mr. Paschalidis said, it is common sense since young couples cannot afford their own homes, they resort to renting. Therefore, he added, the demand is increasing and therefore the supply is also increasing and therefore rent prices are expected to rise, due to the well-known rule of supply and demand.
Asked to comment on whether further increases are expected in the coming months, Mr. Paschalidis replied that this is unknown. "How long it will last is not really known however I appreciate that all these increases will certainly stay with us this year. It is of course very important how long the war will last, which we clearly do not know, and secondly how long the sanctions will be in place because there is a possibility that the ceasefire will end but the sanctions against Russia will remain," he noted.
The fact that Cyprus is an island that does not border with any country in this case is a curse as there is only one route for the import of materials.
"Cyprus is an island and it is only by sea that materials can come in and there are all these increased costs. I think at the moment we are one of the most affected countries. Firstly because we are an island and we depend on sea transport and secondly the quantities we import are small so it affects the price because it is clearly a different price to import for example one ton of iron from 36 thousand."
Lifting the deadlock only through the EU
Could the Government, however, by taking some measures to compensate for the situation or have we entered the stream and the stream is taking us away? Asked to respond, Mr. Paschalidis assessed that it is very difficult for the solution to come at the local level as he pointed out that everything that is happening is out of our control.
"The capabilities of the state are limited, public finances are not in a flourishing state.
They had given grants to various other support measures due to the pandemic. The state does not have unlimited possibilities. It is currently focusing on the really vulnerable groups to get support. Beyond that, I appreciate that there is neither subsidizing rents nor housing prices. The only solution, in my opinion, is to take measures at the European level. For example, to create a support fund as was created during the pandemic or to take as a measure the reduction of tariffs or taxes," he said.
He even gave a typical example of Cyprus moving through European regulations, saying that "there was a reduction in the price of fuel, which in three days evaporated due to the increases, yet the Cypriot government said that they were reduced as much as possible based on the European Union regulation. At least in the short term, a policy should be followed as was the case with vaccines, which the European Union bought and the states supplied. Because if the EU didn't buy them, I don't know how quickly and in what quantities we would have them in Cyprus," he noted.
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