Rent reduction is coming in Cyprus

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7 December 2020 Liza Medvetskaya

There is a lot of concern about rent as the pandemic's impact has brought turmoil to many businesses, which this year have seen their turnover fall by more than 50 percent. However, reclassifications are also being created in residential real estate, mainly in Limassol, where prices are now stabilizing, even with a slight decrease.

The upward trends in rental prices combined with the increase in demand for real estate at the beginning of the year pushed housing rents to skyrocket, mainly in Limassol and Nicosia. However, the coronavirus pandemic, combined with non-proliferation measures, changed the data for consumers and businesses. 

The vice president of the Association of Scientists Real Estate Appraisers, Polys Kourousidis notes that there is now a stabilization in the rental sector, mainly in Limassol, while predicting that from the beginning of 2021, there will be downward trends.

Regarding the issue of rents in the city of Limassol, Mr. Kourousidis said that "although rents in Limassol are at very high levels, what is observed today is a stabilization of prices." He also explained that one could not easily find an apartment to rent in Limassol in the past. However, the data have changed, and now there are better prices and availability.

In addition to the pandemic, the downward trend in rental prices is estimated because landlords are afraid that their premises will be left unoccupied. "Under fear, they are forced to reduce rental prices," said Mr. Kourousidis.

The pandemic, combined with the reduction in consumers' financial capacity, seems to be the main reason for this small rental price reduction. As he explained, the next two years are expected to have some downward trends for more affordable rents. As he said, this is a reduction in prices, mainly in terms of housing. "I think the reduction in rental prices will be evident from the beginning of the new year."

But beyond the rent, there is a massive problem in the rent of shops and restaurants. 

In the restaurants' rents, it seems that the pandemic has created big financial holes mainly due to the measures in combination with the lockdowns. Due to the reduction of the companies' turnover, some people inevitably cannot pay their rent.

Mr. Kourousidis considers that the restrictions and measures, especially in restaurants, will not be lifted so quickly, explaining that this fact may lead to a reduction in rents. 

Of course, he said that there are exceptions, emphasizing that those with large outdoor areas may proceed with rent increases. "Entrepreneurs, mainly in the catering sector, will now want to rent premises with large terraces and outdoor areas so that they can work, so there may be some increase in prices here."

On the issue of rents in retail trade, Mr. Kourousidis stated that a general reduction is expected in this sector. Asked to comment on the duration of the decrease in rental prices, he noted that it all depends on how long the pandemic will last. As he stated, "if next year there is no coronavirus pandemic, then we will return to the current rental prices. "But many predict that there will be recovery and growth in the year 2022", he said in the end. 

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