The restrictive measures imposed by the government of Cyprus at the beginning of the coronavirus pandemic have led many island residents to significantly cut their spending.
They did not have the opportunity to go on vacation, or just spend money on consumer needs. Thus some residents of the country have enough money now, which they are now trying to invest in real estate in Cyprus. Housing on the island is in unprecedented demand not only among young couples who are trying to buy a house or apartment on credit with government subsidies for interest rates, but also among older people.
Property in Cyprus, as before, is the main investment option in the country.
According to a statement from a representative of one of the banking institutions in Cyprus, the incomes of more than 50% of their Cypriot clients have not been affected by the coronavirus pandemic. Thanks to this, they were able to invest their money in real estate.
During a period when deposits have a negative return, the real estate market can be profitable thanks to the profit received from the rent.
By the way, despite the fact that the demand for mortgages is kept below the pre-crisis level, it remains “hot”.
In addition to the demand for home loans, there is also interest in home renovation loans that help channel some of the banks' excess liquidity. Banking circles say that customer behavior about where they spend their spending has also changed. In addition to real estate investments, Cypriots are willing to invest their money in buying cars.
Banks that monitor the movement of funds on their customers' cards say that due to the coronavirus pandemic, they no longer spend money on travel and booking flights.
Business is different, since the first thing it depends on is liquidity. Since the beginning of the pandemic crisis, banks and companies have agreed to find solutions to increase liquidity, mainly by increasing overdrafts. As for the issue of state guarantees, which is being discussed by the parliament these days, after a year of waiting, banks see that this is an option that will reduce their risks. The financial institutions of the country emphasize that they are trying in every possible way to help entrepreneurs in solving the problems they face.
As you may know according to the Central Bank of Cyprus, the total volume of loans provided to households and businesses by the end of February, excluding restructuring, amounted to 383 million euros. New loans disbursed in 2020 fell to € 2.4 billion from € 3.2 billion in 2019, showing an overall decrease of 25%.
Interesting real estate investment projects in Cyprus are here.
