Buying property for short-term rent in Cyprus was until recently a very profitable investment.
The coronavirus pandemic however has turned everything upside down. Due to a sharp decline in the tourist flow, the short-term rental market bears today the greatest losses.
There is no doubt that the prices for renting beach cottages in Cyprus in the coming year are going to be significantly lower than what we are used to seeing in 2019.
After several years of continuous growth there has been a downward trend in prices in 2020, which, most likely, will continue until the situation with COVID-19 becomes clear.
It should be noted that income from short-term rentals decreased not only in Cyprus, but also in other countries.
Experts are convinced that as investment and tourist flows stopped, the demand for short-term rent from owners continues to fall. The attractive packages offered by the hotels will provide this segment with excellent competition in the future.
Due to the COVID-19 restrictions the demand for the purchase of this type of housing has dropped sharply. This led to a decrease in prices, which is most observed in Paphos, Larnaca, Paralimni and mountainous Limassol, where interested buyers from Germany, Great Britain, the Persian Gulf countries, China and Russia were recently looking for real estate.
According to forecasts of real estate experts, the cost of renting beach houses in 2021 will be:
- Famagusta: from EUR 8 to EUR 14 per m2 (EUR 10-12 in 2020 and EUR 18-22 in 2019)
- Larnaca: from EUR 6 to EUR 10 per m2 (EUR 6-10 in 2020 and EUR 8-10 in 2019)
- Limassol: from EUR 16 to 35 per m2 (EUR 20-40 in 2020)
- Paphos: from EUR 8 to 14 per m2 (EUR 10-12 in 2020).
In turn, experts are confident that the average selling price of such housing will also fall in 2021:
- Famagusta: to EUR 2000-2700 per m2 (EUR 2300-2800 in 2020)
- Larnaca: prices should remain approximately at the same level as last year: EUR 2000 to 2700 per m2
- Limassol: to EUR 3000-4500 per m2 (EUR 3500-4000 in 2020)
- Paphos: to EUR 2500-3600 per m2, (EUR 2800-3000 in 2020).
The opinion of the top real estate agency in Cyprus DOM:
At the beginning of last year, rental prices for real estate in Cyprus really fell slightly, as the owners tried to somehow attract tourists. However, we should not expect that prices will continue to decline significantly. In our opinion, they will soon return to the pre-crisis level. A lot of management companies that were previously engaged in short-term rentals have abandoned this practice, and now there is a small shortage of objects for short-term rent in the country. In most cases, this kind of housing from the owners is now rented out or already booked for the summer months. And developers who rent out their properties give a maximum discount of no more than 15%. They are waiting for customers, there is no sharp drop in prices.