George Chrysochos: Demand for real estate constant from international investors, stable from Cypriot buyers

Cyfield Group Director George Chrysochos has shared an assessment that the construction sector will continue its upward course in 2024, due to the continued demand for real estate from international investors, as well as the implementation of planned projects, both in the public and the private sector.

In an interview with InBusinessNews, in the context of "IN Business Forecasting 2024,", Chrysochos points out that there is a steady demand from Cypriot real estate buyers as well, as despite the higher interest rates banks continue to grant loans at a dynamic pace.

According to Chrysochos, the increasing amount of work in the construction sector will bring about various forms of greater investment while also listing anticipated changes to the sector.

Referring to the problems facing the construction and land development sector, he identifies labour shortage as the most significant. In this context, he indicates that the simplification of the process of recruiting workers from third countries, both at the level of technical and scientific personnel, such as surveyors and civil engineers, is immediately required.

As far as Cyfield is concerned, the director emphasises that the organisation's strategy for 2024 is focused on growth and expansion.

"Our group will continue its development path, as we have locked in important and large projects. We will continue to be pioneers in the execution of infrastructure projects with a model of productivity and competitiveness," he says.

An additional goal for 2024, according to Chrysochos, is the completion of the power plant and the entry of Cyfield into the electricity market, its more dynamic presence in Greece, the improvement of efficiency, and the reduction of construction time.

How do you see the economic environment shaping up in 2024, in light of inflationary pressures, high interest rates and unpredictable ever-changing geopolitical developments?

According to Central Bank data inflation has been contained, and we expect raw material costs to stabilise for 2024.

As far as interest rates are concerned we already see the 12M Euribor falling 0.5% which shows that the European economy predicts that by the end of the year there will be a reduction in interest rates of at least 0.5%.

Analysts forecast a drop of up to 2% if inflation stays below 2%. As for geopolitical developments, due to the ongoing war in Ukraine, sanctions against Russians continue with the known impact on our economy.

On the other hand, the war in Gaza has affected tourism from Israel and has temporarily stopped the flow of investments coming from Israel.

We are optimistic that the resilience of the Cypriot economy will once again be effective and we will continue with steady growth rates.

The best indication that our country is on a development path is the full employment of all workers.

This growth has been recognised and rewarded by the latest upgrades by the rating agencies.

What do you consider to be the biggest and most difficult challenges that the Cypriot economy will have to face?

The most difficult challenge that the Cypriot economy has to face in 2024 is the lack of human resources, mainly in critical sectors such as tourism, construction, retail trade and catering.

Also, the Cypriot economy must live up to its reputation as a safe haven for companies and investors amid growing geopolitical turmoil and avoid situations that may cause defamation.

The construction sector

What do you think the course of the sector in which you operate will be in 2024?

For 2024, it is predicted that the construction sector will continue its upward trajectory due to the continued demand for real estate from international investors, as well as the implementation of planned projects, both by the public and private sectors.

We also see continued steady demand from Cypriot real estate buyers, as despite the higher interest rates banks continue to grant loans in a dynamic manner.

In addition to the implementation of many public projects, the state announced a high budget for new projects in 2024.

What are the biggest industry trends and changes you anticipate in 2024?

The increasing amount of work in the construction sector will undoubtedly bring greater investment and changes in the industry.

These investments / changes take several forms:

1. There will be a technological transition to increase productivity as the major manufacturing methodologies and machinery are no longer sufficient for today's needs. We expect automation in project management and customer service, but also communication between all construction agencies with programs such as BIM (Building Information Modeling).
2. There will be an energy upgrade of buildings and constructions as at the last COP28 meeting the criteria, commitments and requirements of banks and states for the energy efficiency of buildings and infrastructure were tightened.
3. Because of the changes in VAT as well as the increase in property prices seen in the last period, new houses and flats will be smaller to be more affordable for buyers.

The sector’s most important problems

What are the most important problems that are currently plaguing your sector and the solution of which you consider to be a priority in view of the new year?

The most significant problem of the construction and land development sector is the labour shortage. There is an immediate need to simplify the process of recruiting workers from third countries, both at the level of technical and scientific staff, such as surveyors and civil engineers.

Strengthening scientific staff, in addition to improving project management, will bring in experience and know-how. This strategy will empower Cypriot companies, enabling them to undertake more complex projects and reduce dependence on foreign companies.

There is a huge delay in the issuance of planning permits and building permits which, combined with the inability to produce new properties due to a lack of human resources, contribute significantly to the urban crisis.

It is necessary to digitise bureaucratic processes, such as at the Land Registry and Town Planning departments, which currently have a significant volume of unprocessed cases, thus hindering the development and implementation of plans.

There is also a huge delay in resolving disputes between owners and contractors due to the courts taking up to 15 years to deliver justice.

This uncertainty creates enormous sustainability pressures for contractors,

If you could ask the government to take specific measures or formulate policies to support/enhance your sector, what would they be?

As we have mentioned many times the most important problem of the sector is the workforce.

One proposal that the government could implement is during the examination of asylum seekers to be entitled to work in the construction industry. In addition, the state must immediately adopt the Cyprus Scientific and Technical Chamber’s recommendations for the issuance of town planning permits by certified architects up to two-story structures.

This will reduce by 60% the cases considered by the town planning department, so the time for issuing the remaining permits will also be dramatically reduced.

Proper staffing and procedures in view of local government reform will also contribute to the speedy issuance of permits.

Cyfield in 2024

What are your organisation's plans/strategy for 2024? Should we expect new developments and your further consolidation in the market?

Our organisation's strategy for 2024 focuses on growth and expansion.

Our group will continue its development path, as we have locked in important and large projects. We will continue to be pioneers in the execution of infrastructure projects with a model of productivity and competitiveness.

We will continue to serve the residential needs of local and foreign buyers in Nicosia, Limassol and Larnaca with an abundance and wide range of housing and apartment options.

Our company also invests in the development of office and other commercial buildings to serve the growth and development of companies in Cyprus.

An additional goal for 2024 is the completion of the power plant and our entry into the electricity market, our more dynamic presence in Greece, the improvement of efficiency and the reduction of construction time.

In this context, we are also planning initiatives to strengthen the workforce through training and skill development, upgrading our personnel who form the backbone of the organisation, while at the same time strengthening relationships with our existing customers.

(Source: InBusinessNews)