Building a house today is a decision that entails large costs, problems related to financing and construction, delays in delivery and quality problems, titles, delays in building permits, etc. Building a house is an investment decision, which must be carefully studied, since most families build a house once in their lives and the final decision in most cases can be irreversible. Below are some general guidelines, which could help the homeowner to assess the cost of building a house, as small items, which could increase the cost of the house, are usually ignored.

Building Plot Cost

Before the start of the construction of your own house, at least the plot must be, or almost be, paid. This will certainly give you an edge with home construction cost financing and is a prerequisite for all financiers. For the transfer of ownership of the parcel, a government transfer fee of 7% to 8% (on average) is required on the market value (not necessarily what you paid) of the parcel.

Mortgage Cost and Finance

To register a mortgage, a fee of approximately 1% of the amount of the Mortgage will be paid in the Land Registry. Normally the amount of the mortgage is the actual loan %2B 20% on top. You’ll have to pay stamp duty and other bank charges, which could take the form of a once-and-for-all bank charge (say, on average CYP1000). If you borrow from a bank, there is an additional charge of approximately 1.5%-2.0% per year on top of the statutory base rate of 4.5%. Today there are many alternative housing schemes including life insurance financing, co-op financing, etc., extending for 25-40 years and own contribution of approximately 20% (usually through life insurance to finished).

Cost of architectural drawings

It is imperative to use a qualified architectural office that will take responsibility for the work done. You should not compromise on this, since the Architect is the most important person in the entire process of building your house. Yes, go to different offices and discuss fee levels and then make your decision, but always use a qualified architect. Rates are normally around 5% of the total cost of the building and include design and supervision. Some architects go up to around 6%-8%.

You will also need to hire a civil engineer to carry out the structural design. This cost, with supervision, is approximately 1% of the cost of the building.

The cost of the building to which it refers includes all the elements, but not the fees paid to the Authorities and decorative elements. So please clarify the matter with the Architect, Engineer, etc., what is included is the total cost of the building.

Construction License Fee

The Planning Department charges for issuing the license will cost you around £300 and for the building license an additional £150-£200.

Cost of surveyor and M/E engineer

If you wish to hire a surveyor for the building, a fee of 1% of the total cost of the building is required. The cost of a mechanical engineer (for large buildings) is about 3%-5% on the cost of the Electrical and Mechanical Budget. Although the use of the above is optional, it is recommended for large and complicated buildings.

building cost

Below is a guide to construction costs:

normal quality house

• CYP500 per square meter for the covered area
• CYP150 per square meter for the open terrace
• 250 CYP per square meter for the base

good quality house

• CYP550-CYP650 per square meter of covered area (depending on quality/facilities)
• CYP180 per square meter meter for uncovered area

Plus the cost of a garage (£3,000), water well (£1,500), fence and garden (£3,500-£4,500) for normal size plots.

Costs to other Authorities

Additional costs must be paid for connection to the Water, Electricity, Telephone and Land Registry Office (demarcation, titling etc.) estimated to be around £1000 in total.

-Total cost/m2 for a house (250 m2)
-House 250 m2 @ £550/m2 £138,500
-Fees and Licenses £9,000
-Interest on the loan (say) £6,000
-Other Administrations £1,500
-Garden etc £3,000
-Other miscellaneous expenses £4,000
-Total cost £162,000 or (£745/m2)
-plus add 15% VAT

The purchase of equipment and the cost of installation for central heating is an addition and costs approximately £20/m2. and for the air conditioning system, an additional amount of approximately £40/m2.

A large number of people act as their own building contractors and subcontract all the various jobs and supplies on the site. Where the owner is capable and has sufficient knowledge and time to carry out the supply and coordination function, there could be a potential savings of 8-10% in total cost. Going further, if “weekend housing” is implemented (in which all family and friends volunteer as workers, skilled and unskilled), the cost can be reduced by 12-15%. Obviously, in both cases there is a strong danger that the quality will suffer and the completion time will be lengthened.

In recent years, with the introduction of VAT and the increase in labor costs, we have experienced a 7-10% annual increase in the cost of construction, a level above inflation. This has made building a house much more difficult. A house can take approximately 18 months to complete.

One last item that can cost an additional 5% to 8% is the Contractor’s right to request an increase in labor costs and material prices during the construction period. Therefore, a certain amount for unforeseen costs must be included in the final cost calculation.

Unfortunately, in Cyprus we have not reached any stage of prefabrication, where sections of the house, windows, doors, kitchens, etc. are prefabricated, so that there is a reduction in costs. Also the shortage of skilled labor has created a certain disregard for the quality produced and must always be watched.

The problems related to the construction of a house and the related delays have caused the market to direct its interest towards ready houses (a circumstance that did not exist 7-9 years ago). We expect this trend to continue with a positive effect on ready home values.