Cypriot developers are actively looking for sales options for about two thousand luxury housing units, which are at risk of hovering in the air due to the sudden closure of the investment program.
According to a recent study by PwC, sales of high-end real estate declined by 78% over the year and this is not the limit.
Unfortunately for many developers, there are not so many options for solving this problem.
Cyfield Group CEO George Chrysochos noted that due to the high cost of construction of high-rises, it is impossible to carry out transformations aimed at reducing their cost and focusing on the local market.
According to Chrysochos, developers who have spent from € 4,000 to € 5,000 per m2 on the purchase of land, even taking into account small investments in the construction of buildings themselves, will now not be able to sell luxury apartments on the local market. A local buyer is unlikely to be able to afford housing, the cost per m2 of which exceeds € 5,000.
Thus, by definition, these projects are outside the Cypriot market, said George Chrysochos.
At the same time, he noted that a possible way out of this situation could be to reduce the footage of apartments in buildings under construction. This will reduce the cost of housing, thereby attracting foreign businessmen who are considering real estate in Cyprus as an asset for their summer holidays.
In turn, the general director of D. Zavos Group, Michalis Zavos, expressed the hope that while it comes to the delivery of specific elite real estate objects, there will be a buyer for them.
In particular, he referred to the government's efforts to attract foreign investors through various incentives, as well as the promotion of Cyprus as a location for the headquarters of international companies. Zavos noted that this will "allow firms to rent large luxury offices and apartments for their executives, thus creating a luxury rental market that attracts wealthy investors who prefer to invest in expensive real estate and rent it out for income rather than keeping their savings in the bank."
G&P Lazarou CEO Petros Lazarou expressed the opinion that the luxury real estate market will be gradually changing, noting that developers will withstand the blow from the abrupt suspension of the investment program.
If earlier the profit of developers was 100%, now they get from 10% to 30%. But in the end, they previously made so much money that they can quite stand it until the market recovers. However, it is too early to make any predictions. Due to the pandemic crisis, we cannot know the scale of the consequences of the termination of the investment program. It is possible that even if a new scheme is launched, investors simply will not be able to participate in it due to the next restrictive measures. Therefore, we should wait for the development of events, - said Lazarou.
He agreed that luxury properties can be easily rented out for short periods, such as through the famous Airbnb platform. Or convert them into offices for various companies.
Брокер Андреас Клациас согласился с тем, что элитную недвижимость невозможно продвигать на внутреннем рынке, потому её цена является сдерживающим фактором для киприотов.
По его оценке, в настоящее время на кипрском рынке имеется в наличии около 2 000 роскошных квартир и домов, которые вряд ли можно будет распродать в ближайшем будущем, поскольку из-за дурной репутации Кипр уже потерял самых значимых инвесторов.
Наконец, вице-президент Ассоциации строительных компаний и застройщиков Кипра Йоргос Маис отметил, что главная проблема состоит в том, кто, как и где будет продвигать и продавать элитное жильё.
На мой взгляд, всегда найдутся те люди, которые будут готовы инвестировать в роскошные апартаменты. Однако местные жители - исключение, потому что небоскрёбы спроектированы таким образом, чтобы предлагать своим жильцам больше удобств и услуг за большие деньги. Стоимость является сдерживающим фактором для внутреннего рынка, - подчеркнул Маис.
Однако, он согласился со своими коллегами в плане того, что элитную недвижимость можно использовать на рынке краткосрочной аренды или в контексте привлечения высокопоставленных руководителей компаний, которые будут заинтересованы в аренде или покупке роскошных квартир или офисов.
Broker Andreas Klatsias agreed that elite real estate cannot be promoted domestically, because its price is a deterrent for Cypriots.
According to him, there are currently about 2,000 luxury apartments and houses on the Cypriot market, which are unlikely to be sold in the near future, since Cyprus has already lost its most significant investors due to its bad reputation.
Finally, the Cyprus Land and Building Developers Association (LBDA) noted that the main problem is who, how and where will promote and sell luxury housing.
There will always be those people who are willing to invest in luxury apartments. The locals are an exception, however, because the high-rises are designed to offer their residents more amenities and services for a lot of money. Cost is a constraining factor for the domestic market, they emphasized.
However, they agreed that luxury real estate could be used in the short-term rental market or in the context of attracting senior executives who would be interested in renting or buying luxury apartments or offices.
Photos: DOM LiVE, pixabay.com