13.09.2022
Rent headaches are on the rise as inflationary pressures rise and household disposable income shrinks. At a time when everything is getting more expensive, we see the whole issue becoming a subject of discussion not only among the student world, but also families with children who flock to urban centers.
An increase in loan rates, as well as new data that looks set to be generated on the hot issue of a 5% VAT reduction on primary residences, is expected to push even more people into renting. In some areas, we notice that rents are already at a high level, while in others, following the dictates of the law of supply and demand, they are increasing.
The demand for rentals has also increased since the arrival in Cyprus of people from Ukraine, Belarus and Russia, who flooded into our country after the start of the war, as well as workers from third countries employed in international companies with a presence in Cyprus. and mostly in Limassol.
Since housing is a big capital that affects everyone sooner or later, the question looms as to how rental prices will eventually decline.
The simple answer is to increase the supply. To put it simply, build more facilities that at some point “equalize” the existing demand, and the market will self-regulate, which will lead to lower prices.
The Real Estate Agents Registration Council recommends the introduction of tools that will allay the fears of those who have rented their property to unscrupulous tenants who have left it unprotected by not paying the rent, while in many cases the tenants are causing property damage. The current legal framework needs to be reassessed and revised as it does not provide effective protection to landlords and does not ensure the collection of rent due to them.
In this regard, it is recommended to create a register of problem tenants. A tool that, in theory, approaches the Artemis System, which the financial institutions of the country have and receive information about borrowers. How will this work for tenants?
The register will be maintained by the Real Estate Agents Registration Board and will be available to all members of the Real Estate Agents Registration Board, i.e. professional registered real estate agents. This will include those tenants who have been convicted by a court of law for failing to comply with the terms of the lease. This will allow legitimate real estate agents to be aware of and manage any “bad track record” clients in property rentals. With the establishment of the Register, investors will regain confidence in the sector and will invest again.
With the strengthening of legislation and the creation of the Register in connection with an increase in the supply of real estate, the situation on the market will improve and prices will gradually normalize.
*MRICS, Chairman of the Real Estate Agents Registration Board
