A couple of days ago on Financialmirror.com was published an article dedicated to future perspectives of real estate industry in Cyprus after the end of COVID19 pandemic. The author has analyzed current economic situation in the Republic and suggests some mechanisms to mitigate the pandemic outcome for real estate sector.
Nowadays there is an overload of information going around with multiple views (often quite contradictive). Some talk about slight growth decelerations in the economy, others talk about double-digit falls in GDP, whereas some others talk about total economic disasters. These views have created uncertainty within the real estate world and the truth is that at this point it is hard to make any reliable predictions. The author of the article believes that this economic crisis cannot be compared to the global financial crisis of 2008 or even to the banking crisis that the country experienced in 2013, in which due to the collapse of the banking system, the recovery was prolonged and quite painful for the economy. It is possible that a v-shape recovery may take place, perhaps similar to the 2003 SARS pandemic.
Of course, the magnitude of COVID-19 and the geographical spread of the pandemic cannot be compared to that of SARS, which spread to only 26 different countries with about 800 fatalities worldwide, however, important insights can be retrieved in terms of the duration of the economic aftershock and how the markets may react.
The virus can disappear as quickly as it came, as in the case of the 2003 SARS pandemic; only 8 months separated the first recorded case in 2002 until the end of the crisis in July 2003 and the economy recovered fairly quickly.
Let’s not forget the Real Estate market has always proved to be very resilient to past economic downfalls and it has always been characterized as one of the safest investments. Investment activity will return as it has always done in the past, especially now with the lowest interest rates in history. Obviously, Cyprus needs to increase our presence online as a country.
The country needs to be connected digitally with important market players such as: International bankers, overseas investors and developers etc. Cyprus is going through a phase in which people are more hooked on social media than ever before and Cyprus is ‘nowhere’ to be seen online.
The author admits that there are advertising restrictions and regulations, however, there are various approaches the country could follow:
- Cypriots could provide these important market players, international bankers, overseas investors and developers, with information on a regular basis regarding real estate matters which can be thoroughly filtered (e.g. updated market reports, possible scenarios and economic outcomes) and presented in a way which can offer the much-needed guidance and clarity. The idea is that when the market starts resuming again Cyprus could be in its priorities, as it will have been supporting them with valuable information during the difficult times, and actually proving Cyprus’ Real Estate advantages.
- Using its competitive advantage, (Cyprus has been an investment destination for 40 years providing real estate gains and returns throughout the biggest challenges in history, e.g. the post-1974 invasion years, the international debt crisis in 1982-89, the global financial crisis in 2008, the banking crisis in 2013), the country needs to keep reminding them, how Cyprus can provide opportunities in a professional and measurable context.
- Banks, investment funds and developers are loaded with properties they will have a hard time trying to dispose of in the immediate future. Cyprus could offer global networking it has created over the years to connect these institutions with prospective institutional and overseas buyers. Perhaps Cypriots could create a new specific real estate Cyprus website platform in that regard.