12.12.2022
The assessment that the wait-and-see attitude that seems to prevail in some parts of society regarding investment in new real estate is unlikely to change as long as inflation and interest rates remain high and the government, except in isolated cases, does not implement a concerted stimulus policy housing. Michalis , CEO of Cybarco and President of the Pancyprian Association of Entrepreneurs in the field of land and construction works , says this. Hatzipanagiotu .
In the context of Business Forecast 2023, Mr. Hatzipanagiotu notes that the timely expansion of the sector’s client base to other markets, such as the European Union, Israel and the Arab world, has largely mitigated any negative impact of the war in Ukraine.
At the same time, he points out, there is a growing trend towards developments involving co -living , as well as gated communities. It is to the latter, according to him, that there is great interest from domestic and foreign buyers who are looking for a modern and safe environment for themselves and their families.
Michalis Chazipanagiotu emphasizes the need for government planning and incentives for how each sector will achieve its goals, which must be completed within 2023 if we, as Cyprus, are to be up-to-date.
How do you think the Cypriot economy and market will develop in 2023?
I believe that the difficulties facing the world economy are widely recognized as the result of a number of events, from the pandemic and the outbreak of war to rising inflation and rising prices for energy, transport and raw materials. Major economies have already entered recession, while others are anticipating such a development.
In this area full of problems, Cyprus seems to be affected, but to a lesser extent than the initial pessimistic forecasts. Our country, thanks to its small size, as well as the characteristics of its economy, has proven to be resilient and able to adapt to adversity. Therefore, I am optimistic that the same will happen in this case.
On the other hand, we cannot ignore objective data. On the contrary, the state must take them into account, protect the economy and society. Among the problems we are facing, I would single out as the most dangerous the unprecedented level of inflation in recent years and the sharp rise in bank interest rates. These data, if extended, will deprive the market of significant liquidity, with all the ensuing negative consequences for the development of the economy and the ability of society to satisfy its needs.
Solutions to Strengthen the Sector
What are your predictions for the construction industry in 2023? Do you think 2023 will move in a positive sign, a negative sign, or the same as 2022?
The development sector so far shows a decline in building permits in 2022, which is not surprising given the data for this period. This wait-and-see attitude, which seems to prevail in society regarding investment in new real estate, is unlikely to change as long as inflation and interest rates remain high, and the state, except in isolated cases, does not pursue a coherent housing policy.
A possible continuation of the downturn in new construction should not be seen as a non-society issue that concerns only those of us who work in the industry. One of the main consequences of this decline is that rents remain high, forcing households to devote a significant portion of their monthly income to housing.
The European Commission itself, referring to the Eurogroup , has described this pan-European problem, the solution of which is not expected, except in cases of an increase in the available number of properties . In other words, as long as demand is still a multiple of supply, and the latter does not increase due to an increase in the cost of materials and energy, rent will increase.
As an Association, we have repeatedly mentioned government intervention that would help solve this problem and therefore stimulate the construction industry. Limiting home taxation, providing subsidized or subsidized home loans by the government, and multiple support for green home buyers are just some of the actions that could mitigate the problem.
There is already a positive example of subsidizing part of the interest rate for the purchase of a first home. A program that supported people who wished to purchase their first home without serious financial costs. I hope that this positive experience will serve as a model for similar actions in the new year.
The expansion of the customer base
Geopolitical events, the war in Ukraine and sanctions, how did they affect the real estate sector in Cyprus?
I will not hide from you that the outbreak of the war marked a strong reflection – in addition to the obvious humanitarian parameter – about the possible consequences for the economy of Cyprus in general and the construction industry in particular. It turns out that the early expansion of the sector’s business clients to other markets, such as the EU countries, Israel and the Arab world, largely mitigated any negative impact.
A side effect was the choice of individuals and companies from Ukraine and Russia to settle in Cyprus for a transitional period until the situation normalizes. There are even a notable number of people who have started buying property in Cyprus, appreciating, among other things, the stability of the country and the existence of a large number of communities from their countries of origin, which creates a feeling of closeness for them .
What are the important trends, developments, and developments in your industry that you should pay attention to in 2023?
Over the past three years, not only the methods of our work have changed. Along with this, our way of life has changed and so the industry has also suffered. For example, telecommuting has freed a large number of professionals from working in their offices.
A stay for several months abroad is often the first choice for these people. We already have a significant number of people choosing Cyprus due to its positive qualities, modern services and pleasant lifestyle. The interest of these people has turned part of the sector towards designs that will cover all their needs in the context of a complex of houses, or a building that will include facilities such as a gym.
Accordingly, there is an upward trend in development regarding coliving as well as gated communities. Especially for the latter, I want to note the great interest shown by domestic and foreign buyers who are looking for a modern and safe environment for themselves and their families.
Finally, I couldn’t help but mention the green shift that has been taking place in recent years and is undoubtedly affecting the industry as well. Already at the European level, the goals « Fit for 55 encourage Member States to implement green policies. Particularly in our industry, promoting sustainability is a business stake. Many of the companies have launched projects with “green” features, and others have already sold such devices.
However, the planning of the state on how each sector will achieve the goals and the provision of appropriate incentives in this direction, I believe, should be completed during 2023 in order for us as Cyprus to meet modern requirements.
Current projects Cybarco
What can we expect from your company in 2023 and what are your goals?
Trilogy will be completed in 2023 , which includes two front towers and a public area of 6,850 m2 .
During 2023, the construction of the third (northern) building will also continue, where only 25 apartments are left for sale. From the new year, our team of experienced professionals will also start operations, which will manage rentals, real estate and common areas, as well as offer five-star hotel and lifestyle management services to customers.
To Limassol Marina which is considered one of the most successful development projects in Cyprus, we expect the last ten residences to be sold within a year.
There are also a few luxury apartments left in Aktea Residences 3 in Limassol , which will be completed in 2023. Due to the high demand for residential units in Limassol , two more projects will be announced earlier this year in selected areas: Thalassa Residences in the historic city center, just 150 meters from the pier and Seaview Heights in a panoramic position in Germasogeia overlooking the city and the sea.
Construction of Attikis will also start in 2023 Residences , with which we have dynamically returned to the market of the capital and in which 70% of the apartments have already been sold. The project is located in a prime location in Aglancia , behind the Melkonian Institute.
Finally, in the most idyllic area of Cyprus, close to the Akamas peninsula, the second phase of our Akamas luxury coastal project has just been completed. Bay Villas with fully furnished turnkey villas.
