The coronavirus pandemic has affected to all aspects of Cypriots life.
The country’s economy, social sphere, resident’s psychology are changing, in accordance with new requirements. Real Estate Market is not an exception.
Most affected were Hotels, owners apartments, who rented their apartments for the short-term period. Also, the owners of properties for sale were affected as well.
Most of companies and owners in Cyprus are very optimistic and believe that the direct impact will be relatively shortly and will be able to resume full operations shortly after the measures are relaxed.
In the EY audit of “COVID-19 Industry Pulse Report: Real Estate”, involving construction companies, it is noted that different types of real estate are expected to be affected in different ways and in a different range from the pandemic.
In all three scenarios used by the auditing firm, there is initially a large drop in revenue for 2020, due to a sharp drop in demand for a gradual recovery.
Based on Scenario 3, which represents the most positive course of the pandemic, the real estate sector is expected to recover faster and is also the only scenario that sales in the medium term may reach historically normalized levels after COVID-19. The results of the report is that when examining each different type of asset, homes and offices appear to have higher market returns that others types of real estate.
However, according to Scenario one, which is most pessimistic, apartments are the type of property with the best performance during the forecast period.
Specialists are confident that offices are projected to have relatively stable returns between 2020-2023, but revenue is declining by 2024.
Stores are expected to face a sharp initial drop and remain well below 2019.
The results of the survey indicate that the property acquisition unit is affected by the postponement/delay of purchases, resulting in limited transaction activity. In connection with the development of construction activity, there may be delays in the completion of projects, while finding funds for new projects is more difficult. As for property owners and their management, tenants face liquidity pressure, preventing payments and other contractual obligations.
New and existing tenants are trying to renegotiate the contractual terms (period without rent, duration of rent, amount of rent).