Yiannis Misirlis, Chairman of the Cyprus Land & Building Developers Association, anticipates a positive performance for the real estate market in 2024 and proclaims confidently the future is green.
How do you anticipate the performance of the real estate sector in 2024?
Looking ahead, the outlook for the real estate market in 2024 appears positive, although significant external factors could impact its trajectory. The real estate market in Cyprus demonstrated remarkable resilience and dynamic performance in 2023, despite challenging circumstances.
In fact, 2023 was a record year for our sector. Property sales in Cyprus reached the highest level recorded since 2008, with significant growth across all provinces. Despite challenges like rising interest rates and persistent inflation, the real estate sector played a significant role in the country’s economic performance. Over the years, the members of our association have managed to shape a new and promising profile for Cyprus.
Modern and environmentally friendly green buildings, along with gated communities, golf courses, marinas, and modern office spaces, have created an attractive environment with prospects of prosperity for locals, visitors, and investors. I believe that 2024 will mark the start of the reduction of the ECB’s interest rates, an event that would have a positive impact on property buyers, and buyers’ sentiment. At the same time, our sector still faces many challenges due to geopolitical tensions, high inflation, supply chain issues, and international economic trends that may influence the performance of the real estate sector. However, we have proven as an industry that we can face challenges and difficulties, thanks to the solid foundations of the sector, as well as the professionalism, resilience, and flexibility of its professionals. Overall, the real estate sector is expected to remain a cornerstone of the Cypriot economy in 2024, supporting its developmental trajectory.
What are currently the key locations with high demand for real estate investment?
Currently, the key locations with high demand for real estate investment in Cyprus vary depending on the type of property and the preferences of investors. Limassol remains a top choice for real estate investment. The city offers a vibrant cosmopolitan lifestyle, a booming business sector, and luxurious waterfront properties, making it attractive to both local and international investors.
Nicosia has seen a notable increase in property sales, indicating a growing interest from investors. Our capital city offers a diverse range of real estate options, from modern apartments to spacious family homes, as well as opportunities for commercial investments.
Larnaca remains a key location for real estate investments, with its proximity to airports and marinas attracting both residential and commercial investors.
Paphos also continues to be a popular destination, especially among holiday home buyers. Its beautiful coastline, rich history, and relaxed lifestyle appeal to many investors.
Overall, the key locations with high demand for real estate investment in Cyprus are those offering a combination of economic growth, lifestyle amenities, infrastructure development, and potential for capital appreciation.
What are the current trends in the Cyprus real estate market?
As Cyprus evolves into a regional business and investment hub, particularly due to the attraction of foreign companies establishing their headquarters, there is a growing demand for modern workspaces capable of accommodating a large number of units, offices, and services. These spaces often feature state-of-the-art facilities and technology to support business operations, while it is crucial to be offered to the market at reasonable prices.
Sustainable properties with a low environmental impact and reduced energy footprint are also attracting enormous purchasing interest. Green buildings meet the modern needs of buyers while offering environmental and economic advantages. Our association firmly believes that the future of our industry is green. That is why we are committed to working with all authorities to increase green developments.
At the same time, there is a continued interest in residential apartments, particularly smaller units, as an alternative housing solution. This trend is partly driven by increased market prices, prompting buyers to opt for more affordable and manageable housing options.
Furthermore, gated communities, offering security, privacy, and often additional amenities such as gyms and swimming pools, are attracting significant interest from homebuyers looking for a sense of exclusivity and community living.
Property prices fluctuated in recent years. What are the factors that contributed to this development?
The fluctuation in property prices in recent years can be attributed to several key factors. First and foremost, the dynamics of supply and demand significantly influence property prices. In Cyprus, as demand has surged without a corresponding increase in supply, we’ve seen property prices escalate. This trend reflects the broader situation unfolding across the island.
The rise in construction material costs has significantly influenced property prices, making it difficult for new constructions to be priced competitively. Additionally, increasing interest rates have raised borrowing costs for developers and buyers alike, affecting demand and pushing prices up due to higher financing costs. Lengthy licensing procedures have also posed challenges, delaying new constructions and worsening the supply-demand imbalance. This delay leads to higher prices for existing properties in high demand.
Addressing the housing issue in Cyprus, which is one of the biggest challenges, requires immediate and focused attention. Adopting policies that will contribute to increasing the supply of affordable projects, such as apartments, is crucial. These policies should aim to streamline the development process, making it easier and more cost-effective to bring new constructions to market to meet the growing demand.
How has the war in the Middle East affected the sector? How has the real estate industry of the island responded to this new politico economic challenge?
The war in the Middle East has led to an influx of displaced individuals seeking safety, some choosing Cyprus for its geographical proximity and stability. This has increased housing demand, potentially driving up local real estate prices.
Conversely, the war might affect investor confidence due to regional geopolitical instability, prompting them to seek safer investment havens.
In response, Cyprus’s real estate sector might employ strategies like targeted marketing to attract investors, demonstrating adaptability to capitalize on opportunities and mitigate risks, ensuring the industry’s growth and stability amidst new politico-economic challenges.
Some areas in Cyprus have experienced rapid and sometimes unsustainable development, leading to concerns about overdevelopment, environmental impact, and the quality of construction. To what extent is the real estate sector in Cyprus keeping up with international directives related to sustainability and greater environmental protection?
In recent years, Cyprus’s real estate sector has seen a shift towards greener developments, focusing on low environmental impact and reduced energy use. Industry professionals are increasingly prioritizing sustainable properties that align with buyers’ needs, indicating a move towards greater environmental responsibility.
Despite the lack of mandatory adherence to international sustainability standards like LEED or BREEAM in Cyprus, some developers are voluntarily pursuing these certifications. This not only showcases their commitment to sustainability but also appeals to environmentally conscious buyers.
While there has been progress towards sustainability and environmental protection in Cyprus’s real estate sector, more efforts are needed to fully align with international directives. The ongoing collaboration between the government and the real estate industry is crucial for meeting the objectives of the EU’s Fit for 55 package and promoting a more sustainable built environment in Cyprus.
As an association, we are committed to working with the competent Authorities towards drafting a clear set of regulations and standards about green housing and implementing these for industry as a whole.
At the same time, the Authorities need to incentivize property buyers to choose green housing over brown housing, and therefore, driving the green transition.
Source: Gold Magazine
