The Cyprus property market suffers from a mismatch between what is primarily available and what job seekers are looking for. This comes from a report by WiRE, an independent real estate asset management consulting firm.
“There is a significant mismatch between supply and demand, leading to an imbalance between asset classes,” said WiRE CEO Pavlos Loizu.
Loizu explained that the greatest demand is mainly for apartments in central urban areas and high-quality office space. At the same time, there is ample land on the market, as well as industrial buildings (sometimes outdated) and large houses.
The WiRE Cyprus Property Market Review report covered the second quarter of 2021 and showed interesting results. The urban centers of Nicosia and Limassol are currently experiencing a period of stability. Local residents use government programs to make up for the lack of finance to buy residential property.
“Demand in other areas is still low as they are more dependent on overseas markets and tourism,” the report said.
Larnaca is a notable exception due to the reconstruction of the port and the dismantling of oil refineries.
However, housing prices in Larnaca have remained stable, as in the Famagusta area.
Conversely, house prices in Nicosia and Limassol rose by 0.8% and 1% respectively.
In terms of businesses, the report says they are now increasing the demands on their office space, which has boosted the demand for Class A offices.Class A properties are properties that can receive a premium over the average rent. This is possible in any city or region due to the recent construction of the building and the availability of all necessary infrastructure and amenities. This has also led to a reduction in lower quality office real estate.
In terms of building permits, the report shows that the number of residential property permits rose by 3%. This estimate is given on an annualized basis for the second half of 2021 in terms of square meters. The total number of dwellings grew by 10% year on year over the same period.
Residential property accounts for approximately 80% of the total square meters licensed in 2021.
“Increases occurred in Nicosia (17%), Larnaca (55%) and Paphos (14%), while decreases occurred in Limassol (5%) and Famagusta (11%),” the report says.
According to the report, an analysis of the geographical distribution of all building permits issued shows that the largest decline in their number occurred in rural areas.