25.01.2023
Karma CEO Holdings Nicholas Karullas .
In an interview, Mr. Karullas notes that it is extremely difficult to accurately predict the course that the sector will take in 2023, but he expresses an assessment that if there are no major changes (VAT legislation for the first residence), the sector can maintain its positive course.
Managing Director Karma Holdings talks about the factors that make it difficult for Cyprus to position itself on the investment map, such as the complexity of procedures (bureaucracy) and the lack of infrastructure.
According to Nicolas Karullas , refurbishment of buildings will be the new international real estate trend, which he explains is more of a direct investment than a new build.
What will 2023 be like for the Cypriot economy?
In 2023, we will face many challenges, such as the upcoming crisis in the global economy and in the real estate sector, rising bank interest rates, as well as geopolitical events.
I believe that the sector will be directly affected, but with little impact from the political and energy crisis, as demand is still sufficient and prices, as well as supply, have not reached the levels of 2008-2010. For example, in February 2022, when the war broke out in Ukraine, Cyprus was seen by many as a suitable place to invest or relocate. I think this trend will continue.
What are your forecasts for the land management and real estate sector in 2023?
Investment increased in 2022 with support for the implementation of the Recovery and Resilience Plan (RRP). However, investment in construction was negatively affected by high prices for materials and tighter financing conditions.
Despite the economic circumstances of recent years, investing in property in Cyprus remains safe, even with declining returns. The latest statistics even show an increase in the flow of newly submitted sales documents by 36% compared to the corresponding period last year and by 26% compared to 2019, i.e. before the pandemic. Foreign investment in the third quarter of 2022 unexpectedly increased by 100% compared to the corresponding period last year.
The age-old problem of investors in Cyprus is the complexity of procedures (bureaucracy), which is a factor that hinders the smoothness of the investment process, for example, the immediate issuance of property rights. In addition, the lack of infrastructure such as schools, public transport, etc. are factors that prevent Cyprus from taking its place on the investment map.
It is extremely difficult to predict exactly where the sector will go in 2023, but I believe that if there are no major changes (VAT legislation for first homes), the sector can maintain its positive trajectory.
New real estate trends
What important trends and developments in your industry should be on the lookout for in 2023?
An important role will be played by the inclusion of an energy efficiency certificate in the sector, especially in properties that will be rented out. Building renovations will become a new international real estate trend that is more of a direct investment than a new development.
The needs of the time will lead to changes in the use of housing or offices, and logistics with more specialized high-end developments will become one of the trends in domestic real estate for the next period. Also, a new trend in the coming years will be residential complexes with controlled access, using for tenants not only advanced technologies, but also environmentally friendly materials.
In addition, digitization is and will continue to be one of the main drivers of rethinking the sector, from virtual tours to guide/monitoring/property management to how buildings are built and BIM* will change the real estate sector.
*BIM is Building Information Modeling supported by a variety of tools/technologies involving the creation and management of digital representations of the physical and functional characteristics of a building.
Karma Holdings
What can we expect from your company in 2023?
As a company, we have already gone through several upgrades. Having updated our software under European Union programs, we have created our own mobile application to manage our clients’ properties, we are in the process of announcing our first zero energy efficiency green project in Cape Greco, Protaras .
An excellent complex, located in nature, will be built taking into account the surrounding area, recyclable, natural and biological materials made with zero pollution, and will have its own water recycling system, photovoltaics, etc.
As a company, we have added a new department to our organizational structure, the Environmental Development Management Department, which is dedicated to the research, management and implementation of such developments.
Our goal is to continue the steady course of recent years by offering high performance purpose built residential properties to local and international buyers in conjunction with our after sales customer service department on the new Karma platform where our customer can receive 24/7 service.
