Building a home today is a decision that entails high costs, financing and construction problems, delivery delays and quality problems, titles, delays in construction permits, etc. The construction of a house is an investment decision, which must be studied carefully, since most families have built a house once in their life and the final decision in most cases can be irreversible. Below are some general guidelines that could help the homeowner evaluate the cost of building a home, as small items that could add to the cost of the home are generally ignored.
Building plot cost
Before the beginning of the construction of your own house, at least the plot must be, or almost, paid. This will certainly give you a head start with financing the cost of building the house and is a prerequisite for all financiers. For the transfer of ownership of the parcel, a government transfer fee of 7% -8% (on average) over the market value (not necessarily what you paid for) of the parcel is required.
Mortgage cost and finances
To register a mortgage, a fee will be paid to the Land Registry Office of approximately 1% on the amount of the Mortgage. Typically the mortgage amount is the actual loan% 2B 20% on top. You will have to pay stamp duty and other bank charges, which could take the form of a bank charge once and for all (say, on average CYP1000). If you borrow from a bank, there is an additional charge of approximately 1.5% -2.0% per annum in addition to the legal base rate of 4.5%. Today, there are many alternative housing schemes including life insurance financing, cooperative financing, etc., that span 25-40 years and contribute approximately 20% (usually through term life insurance) .
Cost of architectural drawings
It is imperative to use a qualified Architectural Office who will have responsibility for the work performed. You should not compromise on this, as the architect is the most important person in the entire process of building your home. Yes, go to different offices and discuss the rate 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 are 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 aforementioned building includes all the elements, but not the fees paid to the Authorities and the decorative elements. So clarify the matter with the architect, engineer, etc., what is included is the total cost of construction.
Construction license cost
The Town Planning Department charges for issuing the license will cost you around £ 300 and for the building license an additional £ 150- £ 200.
Surveyor and M / E Engineer Cost
If you want 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 approximately 3% to 5% of the cost of the electrical and mechanical budget. Although the use of the above is optional, it is recommended for large and complicated buildings.
Below you will find a guide to construction costs:
Normal quality house
- CYP500 per square meter for the covered area
- CYP150 per square meter for uncovered terrace
- CYP250 per square meter for basement
Good quality house
- CYP550-CYP650 per sq. meter per area covered (depending on quality / facilities)
- CYP180 per square meter meter for open area
Plus the cost of a garage (£ 3000), water well (£ 1500), fences and garden (£ 3500- £ 4500) for normal size pitches.
Costs for other authorities
Additional costs must be paid for connection to the Office of Water, Electricity, Telephone and Land Registry (demarcation, issuance of title, etc.) estimated to be around £ 1000 in total.
-Total cost / m2. for a house (250 square meters)
-House 250 sqm at £ 550 / sqm £ 138,500
-Fees and licenses £ 9,000
-Interest on the loan (say) £ 6,000
-Other authorities £ 1,500
-Garden, etc. £ 3,000
-Other miscellaneous expenses £ 4,000
-Total cost £ 162,000 gold (£ 745 / m2)
-at the top add 15% VAT
The purchase of equipment and the cost of installing the central heating is an addition and costs approximately £ 20 / m2. and for the air conditioning system, an additional amount of approximately £ 40 / m2.
Large numbers of people act as their own construction contractors, outsourcing all construction work and supplies. In cases where the owner is capable, has sufficient knowledge and has the time to perform the supply and coordination function, there could be a potential savings of 8-10% on the total cost. Going further, if “weekend housing” (whereby all family and friends offer themselves as workers, skilled and unskilled) is implemented, then the cost can be reduced by 12% -15% . Obviously, in both cases there is a strong danger that the quality suffers and the completion time is prolonged.
In recent years, with the introduction of VAT and rising labor costs, we have experienced a 7-10% annual increase in construction cost, a level higher than inflation. This has made building a house much more difficult. A house can take approximately 18 months to complete.
A last item that can cost between 5% -8% in addition, is the right of the Contractor 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 estimate.
Unfortunately in Cyprus we have not reached any prefabrication stage, so sections of the house, windows, doors, kitchens, etc. are prefabricated. so that there is a reduction of costs. Furthermore, the shortage of skilled labor has created a certain indifference towards 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 turn 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 the value of homes listed.