2020 has dramatically changed the lives of people around the world. Cyprus was no exception.
The coronavirus pandemic has dealt a big blow to the country's real estate sector, which has been hit hard by border closures.
Investors chose to minimize real estate transactions in times of uncertainty, and this affected the cost of housing. At the end of 2020, many secondary property owners and developers willingly made good discounts to buyers.
In turn, due to the lack of tourists, the owners who rented out apartments and houses for short-term rent were left without clients, and, accordingly, without earnings. Then they realized that an empty apartment would not bring money. Therefore, they made concessions and began to massively transfer their assets to the fund for long-term rental housing.
On April 1, the Cypriot authorities opened the borders to tourists.
The local real estate market reacted immediately to these changes. Housing prices in the country began to stabilize, returning to pre-crisis levels.
- Firstly, many developers are canceling their hot offers and super discounts of 20-30%, which they were ready to provide for finished new buildings in January 2021. In addition, developers have returned to the practice when prices for apartments in new buildings directly depend on the stage of completion of the building. By the way, during the height of the coronavirus pandemic and the closure of borders, developers set the average cost per m2, which remained stable.
- Secondly, property owners have stopped making major concessions when selling their property. The maximum discount they are ready to offer now is 10-15%. Moreover, it is likely that these numbers will only decline.
- Thirdly, as the first tourists came to the island, homeowners who rented apartments and houses for long-term rent during the coronavirus pandemic began actively transferring them to a short-term rental fund.
Finally, it is worth noting that with the opening of borders, the market for the relocation of businesses and employees to Cyprus has been activated.
So, over the past week, the popular DOM real estate agency in Cyprus, has received 9 applications from large foreign firms that have expressed a desire to transfer their offices with employees (from 40 to 150 people) to Cyprus. This will undoubtedly increase the demand for rental properties in Cyprus. And in combination with a decrease in objects that were rented out for long-term rent, it can lead to an increase in housing prices.
We must say that due to the cancellation of the Cyprus passport program, one should not expect the market to be oversaturated with new supply, moreover, all the signs point to the risk of its shortage.
In addition, the desire to acquire a house by the sea or change an apartment for a more spacious one - with a balcony, or better with a terrace and a sea view - arose over this year for many. But whether it will be satisfied, we will find out in the near future.