The cost of building materials in Cyprus continues to trend upward, albeit moderately, with potential implications for the real estate sector. According to data released by the Statistical Service on Wednesday, the Price Index of Construction Materials reached 118.92 units in May 2025 (base year 2021=100), reflecting a 1.34% year-on-year increase compared to May 2024.
On a month-to-month basis, the index showed a slight decrease of 0.09% from April 2025. For the January–May 2025 period overall, construction material prices rose by 1.23% compared to the same timeframe last year.
Sector Breakdown and Impact on Development Costs
The data revealed varying trends across major material categories. Year-over-year price increases were observed in:
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Minerals: +3.65%
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Mineral products: +3.47%
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Wood, insulation materials, chemicals, and plastics: +0.48%
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Electromechanical products: +0.37%
Conversely, metallic products—a critical input for structural components—registered a decline of 0.74%.
These pricing shifts are relevant for both developers and investors, as they influence overall construction costs and potentially affect project timelines and unit pricing strategies. While the general increase remains modest, the continued rise in non-metal components like minerals and insulation materials could subtly impact build quality specifications and affordability margins, especially for mid-market residential projects.
Real Estate Outlook
The slight easing of construction inflation suggests a more predictable cost environment for new developments—beneficial news for investors eyeing off-plan properties or newly launched projects. This relative stability may support continued momentum in residential and mixed-use real estate, particularly in regions like Larnaca and Paphos, where demand for new housing remains strong.
As developers monitor material pricing trends closely, they may continue to focus on efficient design and build practices to maintain profit margins while delivering homes that align with buyer expectations.
Source: Stockwatch.com.cy