Michalis Hatzipanagiotu, President of the Pan-Cyprus Association of Land and Construction Entrepreneurs and CEO of Cybarco Development Ltd, says it is necessary to create incentives to attract investors to Cyprus.
At the same time, Mr. Hatzipanagiotu notes that the economic consequences of the sanctions in Russia have already manifested themselves, especially in the land and construction sector.
However, he notes that in recent years Cyprus has expanded its clientele in terms of investment and property purchases, attracting individuals and companies from Israel, the Arab countries, the UK and Europe.
However, Mr. Hatzipanagiotu emphasizes that much remains to be done to ensure the competitiveness of Cyprus, since, as he points out, there are other countries on the map that are considered attractive for investment.
In recent years, most foreign buyers of real estate, especially luxury ones, have come from Russia. Will Cyprus lose Russian buyers and investors due to sanctions?
Relations between Cyprus and Russia have traditionally been close. For many Russians, and indeed for a wide variety of social strata, Cyprus was the choice for recreation, investment and permanent residence.
It is clear that at this stage and as long as the war and the sanctions resulting from it continue, this connection will be broken. Already, in fact, there are signs of such a situation in the field of land management and construction, since all transactions that were underway were “frozen” in the last month.
For how long and what the extent of the problem will be, it is not yet possible to estimate. Basically, they will be determined by the duration of the war and possible events that will change the West’s attitude towards the sanctions it has imposed.
However, at the same time, movements in the international money markets, as well as the change in the exchange rate of the ruble against the dollar and the euro the next day, are important parameters.
Alternative markets for Cyprus
From what other markets does Cyprus attract investors and property buyers?
In recent years, Cyprus has managed to attract investors and foreign property buyers from different countries, expanding its clientele. This is positive, as it protects Cyprus from volatile factors that can lead to this or that market fall, as it is happening now.
However, much remains to be done to ensure the competitiveness of Cyprus as a destination for foreign direct investment compared to other countries in the region.
So far, the picture is good for individuals and companies from Israel, Arab countries, the UK, as well as some European countries. Our country has many of the characteristics that foreign buyers are looking for, such as a favorable climate, stability and security, which are associated with our participation in the European Union and the Eurozone.
The need for a new investment program
At the same time, we must remember that these characteristics can be found in other states, which sometimes perform better in areas such as ease of doing business, digitalization and bureaucracy. Therefore, in addition to direct reforms in these areas, the state should create incentives to attract investors to the country.
The ongoing efforts to relocate foreign companies to Cyprus (headquarters) are moving in the right direction. At the same time, however, there should also be a modern investment program that will deal with both corporate forms and individuals, since it is the managers and employees of these companies that will ultimately be transferred to Cyprus.
Growth of Ukrainian buyers
Given the development of events, have you noticed an increase in the number of buyers of real estate from the Ukrainian market?
Even before the start of the war, fearing an invasion, Ukrainian companies considered Cyprus as a possible country for resettlement. As expected, their number increased after the start of the bombing.
Similar interest has been observed at the private level, with some of them even arriving in Cyprus, continuing – for the time being – to rent property for as long as the fighting continues.
However, the situation is so critical, and the images coming from Ukraine so unpleasant, that what matters now is the end of the war. Once this happens, we will be able to assess the impact it has had on the Cypriot economy.