The coronavirus pandemic has had a significant impact on the Cyprus property rental market.
Recently, prices for some objects have decreased by an average of 10-15%.
Simultaneously, the overall value of real estate across the island is still holding at last year's level, as most owners still harbor hope for a quick end to the COVID-19 crisis. However, real estate experts are confident that soon they will have to make concessions and reduce the rent to clients.
So, already today, tenants of commercial space are increasingly changing their preferences. Internet commerce is gaining momentum in Cyprus, so people in business are gradually abandoning large stores' maintenance with an area of 500 - 600 m2. Instead, they rent small premises for offline trade and large warehouses to store their goods, from where it is more convenient to deliver to customers.
According to the sales manager of Real Estate Danos - Angelos Constantinou, the demand and prices for office space did not suffer. On the contrary, there is a tendency to increase the need for new modern premises with energy class A, more economical.
As for the prices for student apartments, they remain stable due to the prepayment made by students at the end of the last academic year. However, the dormitories for students appear in Cyprus. Many of them are moved to distance learning.
Konstantinou emphasized that a drop in rental prices for real estate on the most famous metropolitan street Ledra cannot be avoided. It is especially true for small shops and restaurants. Undoubtedly, the coronavirus has hit them the hardest because people limit their purchases to only the essentials. If the rental price here varies from 18 to 38 euros per m2, then in 2021, tenants can count on 20-27 euros per m2. The drop in rental rates will be about 29% per m2 in 2021 compared to 2020.
Finally, Constantinou noted that Cyprus' property prices have not yet come under significant pressure because everyone expects the crisis to be temporary.
Decrease in rental rates for residential and commercial real estate from 10% to 15% compared to last year for the same period, states the Association of Real Estate Owners George Muskides.
"The protracted coronavirus crisis, which had a significant impact on retail store turnover, forced owners to compromise with entrepreneurs and even temporarily reduce rents. After all, businessmen preferred to change the landlord," Muskidis said.
Also, he noted that residential real estate is under the same pressure due to the uncertainty prevailing in the labor market.
"I do not see a significant drop in property prices due to the coronavirus pandemic yet. Nevertheless, it should be noted that after a long growth, they stopped at the level of the last year. As for the investment program, we must forget about it for at least the next two years. It is in the interests of developers who are targeting foreign buyers to change the direction of their activities and build housing at more affordable prices to be able to sell it," concluded Muskidis.