It has been said several times, by competent government bodies and industry professionals, that several factors create obstacles to the smooth development of the real estate market. One of these factors is the capital of human resources.
It is known that it is now difficult for a construction company, or a small contractor, to find Cypriot workers. Therefore, a large part of the positions are filled by foreign personnel. After the flight of a significant number of Syrians, who returned to their country due to the change of regime, the flight of several Turkish Cypriots followed, who are now employed in the occupied territories due to the construction explosion that is taking place there and are therefore able to possibly find better wages.
There was an attempt at the Government level to bring workers from Egypt with an interstate agreement, but this effort did not have the desired results. And this is because, as we are informed, such conditions were set in order for a contractor to be able to employ workers from Egypt, which many - and especially small ones - did not meet.
With all of the above in mind, an important issue has arisen in the market, which is of great concern to those directly involved.
A few days ago, the Real Estate Development Association pointed out that the lack of labour in the construction sector is a significant obstacle in the effort to increase the supply of residential stock in the market. Even when a project is permitted, it must be possible to complete it within a reasonable timeframe. Housing policy, therefore, cannot be examined independently of the actual productive capacity of the construction industry.
Distortions in the system
It is not enough that it is difficult for one to find employees to proceed with the implementation of a project, the system does not favour the whole process by itself, as there are "distortions" that cause problems. As it has come to our attention, a contractor can legally secure a license to employ a foreign employee, but in the process this license becomes illegal. How is this possible? The contractor first submits an application to the Department of Labour (Ministry of Labour). This department examines whether there is indeed a shortage of labour in the market and issues an 'authorisation in principle'.
The contract is then transferred to the Department of Civil Registry and Migration (Ministry of Interior) for the issuance of the final Temporary Residence and Employment Permit. If Immigration detects problems (e.g., the employee has a history of deportation, a criminal record, or is deemed a danger to public safety), it will reject the application or revoke the permit, automatically making their work illegal.
At the same time, even if all the permits are issued, the Inspection Service of the Ministry of Labour or the Aliens and Immigration Service (YAM) of the Police can carry out an inspection at the construction site. If it is found that the foreign worker is employed by a different employer, in a different specialty than the one approved, or if the contractor violates the terms of the collective agreement, the license is cancelled and the employment is now considered illegal.
Of course, this part is not considered a distortion, especially if there is illegality on the part of the employer, but it is indicative of the many services involved in this process and how very easily a legal leave can become illegal.
Syrians are playing a game
Many Syrians may have left the Cypriot market, but a significant number remain here. These are the people who have years of service in Cyprus, have learned the way of working, but also the system and are an important part of the construction industry.
But what has happened in recent years? Several of them have been upgraded from workers to subcontractors. Therefore, when a contractor needs subcontractors to move a project forward, they turn to them. Who, in turn, turn to their former colleagues workers to hire them.
However, the latter, now seeing the need that exists, have not only raised their prices, but many of them no longer work with the method of daily wage, but with the type of work they will implement. What is the result of this chain? The cost for a contractor in the part that concerns the workforce has increased, but at the same time it has become unimaginably difficult to find workers.
