The closure of the passport program and the outbreak of the coronavirus pandemic have had a huge impact on all segments of the Cyprus property market.
Owners of apartments, houses, villas have suffered a lot. And of course, the owners of summer cottages are no exception.
If until recently the purchase of real estate for short-term rent was a very profitable business in Cyprus, today everything has turned upside down. There is no longer any doubt that the prices for renting beach cottages in Cyprus in the coming year will be significantly lower than those that we used to observe a couple of years ago.
According to Danos & Associates, rental prices for this category of real estate in 2021 will remain relatively low compared to prices in 2019. The company stressed that due to the coronavirus pandemic, the large fluctuations in the cost of buying and renting such housing occurred in 2020.
According to Danos & Associates forecasts, cottage prices in some cities of Cyprus will remain stable in 2021, while in other cities, they will decrease or increase.
According to experts, the cost of renting houses on the seashore of Famagusta district will be €6-10 per m2 (€10-12 per m2 in 2020 and €18-22 per m2 in 2019).
No significant changes are forecasted in Larnaca. According to Danos and Associates, the average rental price for summer cottages will remain at €8-12 per m2 here (€10-12 / m2 in 2020 and €18-22 / m2 in 2019).
Rental prices in Limassol for summer cottages will be €16-35 per m2 (€20-40 per m2 in 2020 and €20-60 per m2 in 2019).
The average rental price for summer houses in Paphos will be around €6-12 per m2 (€10-12 per m2 in 2020 and €20-24 per m2 in 2019).
As for the sale prices, experts are confident that cottages in Famagusta will cost €1800-2500 per m2 in 2021 (€2300-2800 in 2020). In Larnaca - €2500-3000 per m2 (€2200-2700 in 2020), in Limassol - €3000-4500 per m2 (€3500-4000 in 2020), in Paphos - €2000-3000 per m2 (€2800-3000 in 2020).
It should be noted that villas in Cyprus, due to the economic and epidemiological crisis, became a kind of luxury for Cypriot and foreign investors.
However, profitable real estate (which can give stable rental income) will remain an attractive investment in the near future if it provides investors with protection against a possible sharp rise in inflation.
The coronavirus pandemic, the economic crisis and the closure of the Cyprus investment program are decreasing the demand and, accordingly, the prices of Cyprus property, especially in luxury houses by the sea. In addition, the prices are influenced by the decrease in activity in the short-term rental market. As the global economy grapples with the coronavirus pandemic, new data is emerging in the field of vacation homes, as well as the real estate market in general. Those who have opted for short-term rentals, the Airbnb business, are in a more difficult position now.
It is expected that the stabilization of prices in the real estate market will occur in 2021-2022. In the current circumstances and after the rationalization of prices, an increase in demand from foreign investors is predicted.