Cyprus has no record of how many homes are actually available for sale, because those with building permits cannot be separated from those already sold, the Cyprus Property Developers Association said.
The association also said foreign buyers account for two in every ten homes sold, too few to push prices up as sharply as has been suggested.
Its representatives, who analysed data on sales contracts and building permits, said the number of permits, often cited as an indicator of supply, does not give the full picture and may even lead to wrong conclusions.
If permits are issued for 10,000 homes and 5,000 of them have already been sold, for example, the supply actually available is half what is calculated. This creates a false picture that also affects the state’s decisions, the association said.
On foreign buyers, the association said the rise in house prices did not appear to be caused by their purchases, at least not to the extent presented.
The legislation being proposed on the issue did not appear to be based on adequate data, it added. There was no study showing that the same foreign buyer purchases more than two homes, so a possible cap would not appear to make a substantial difference.
The association added that the shortage of workers has pushed the construction sector to its limits, so a project that receives a permit will not necessarily be built straight away.
House prices in Cyprus are under pressure as supply falls short of demand, construction is close to capacity because of the labour shortage and building costs remain high. A record of the housing stock against demand would show how many homes the country is short of and help shape a strategy to increase supply.
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