Construction Costs in Cyprus to Increase by 10-20% Due to Climate Changes and the "Green Transition"

In the coming years, construction costs in Cyprus are expected to rise by 10-20% due to climate changes and the European Commission's requirements for transitioning to a "green economy." According to Phileleftheros, this forecast comes from Danos and Associates, a company specializing in real estate evaluation and consultancy.

To meet the European Union's goals set for 2030 under the Fit for 55 climate program, Cyprus will need to undertake significant reforms. Without these efforts, citizens and companies will have to pay for air pollution resulting from the heating and cooling of homes and apartments. The new regulations imposed by the EU will lead to further price increases in the construction sector.

Fit for 55 is a climate program by the European Union aimed at reducing greenhouse gas emissions by 55% by 2030 compared to 1990 levels (and to zero by 2050).

By 2028, all new buildings must have zero emissions of pollutants. For this to happen, Cyprus will need to adopt the relevant laws. This means that for purchasing property worth 350,000 euros, an additional 50,000 euros will be needed for acquiring insulation materials and installing modern energy systems. Consequently, the prices for selling or renting eco-friendly properties are expected to rise by an average of 20%, according to Danos and Associates analysts.

By 2040, EU countries will have to ban the use of oil and gas for home heating. This means that heating systems will need to operate without gasoline, diesel, or fuel oil, and other eco-friendly solutions will need to be implemented.

By 2030, energy consumption in buildings should decrease by 16%, and by 2035, it should decrease by another 20-22%. By that time, offices and new buildings should become energy independent.

By 2028, all buildings used or owned by government agencies must have zero emissions. This requirement will increase the demand for energy-independent offices in Cyprus.

Meanwhile, the European Commission is discussing a new goal — to transform all buildings in the EU into zero-emission buildings by 2050. Exceptions will be made for properties in rural areas, churches, historical monuments, and architectural landmarks.

Another factor that could lead to increased real estate expenses is the rising cost of insurance policies due to potential risks associated with climate change.

"Perhaps the risk of flooding due to rising sea levels or air temperatures seems like a distant future scenario or dystopia, but one cannot ignore the potential damage to Cyprus's coastal cities," says Kyriakos Kiliaris, Head of Marketing at Danos and Associates.

Due to melting glaciers, there is a risk of flooding in Cyprus's coastal areas, which could lead to a decrease in coastal property values and an increase in insurance costs.

According to Kyriakos Kiliaris, the recent catastrophic floods in Greece are a vivid example of the destructive power of extreme weather events, causing significant damage to agricultural lands and infrastructure.