When it comes to real estate, it turns out that the poverty of other countries helps Cyprus from time to time. Those of a more “mature” age remember the great interest in Lebanon in the past as a result of the civil war, followed by the war in Yugoslavia, then instability in Russia, and now the war in Ukraine.
Much of this foreign interest has been directed mainly towards Limassol and Larnaca, which has helped boost demand and maintain property values.
Now we are seeing the results of the situation in Ukraine with a sharp increase in demand for rentals (again in Limassol and Larnaca in the first place) mainly for apartments and to a lesser extent for office space. Notably, requests include slightly more expensive properties, such as one-bedroom apartments for rent at €1,000 per month and offices at €20 per sqm, as well as more prestigious residential properties at €2,000-3,000 per month.
At the same time, interest is emerging in entire apartment buildings, presumably for entire families and groups, as well as hotels that are rented out without explicit intentions. However, there is no demand for high-end real estate, such as luxury apartments in high-rise buildings.
We do not know if the demand will continue and how long it will continue, as it will depend on the brutality and duration of this highly unfortunate conflict.
While the Cypriot government offers some financial assistance to Ukrainian refugees, this is not enough for long-term stable living and such interests should therefore be treated with caution. Interest is added to the increase in rents for apartments already high for various reasons such as increased construction costs, rising interest rates, inflation and so on. This will hit local residents who are already struggling to meet current rents on average incomes.
It is worth noting that the idea of having these Ukrainian refugees fill a talent gap in the tourism industry is not going to work. Not many of them are well educated and highly qualified, and they are mostly women and children. In addition, their knowledge of English is limited.
Last Saturday, the Alfa TV channel showed a 14-year-old Congolese girl who arrived in Cyprus almost five years ago. A girl who came first in her class at a local Greek-language school told a nasty story. After her family worked hard for years, her father at a gas station and her mother a cleaner, with no handouts from the government, they now face deportation. This speaks of not always obvious, but widespread racism on the island.
At the moment we have about 15,000 Ukrainian refugees – there will be more – in addition to the refugees and migrants that we already had, which is about 5 percent of the population. These people can increase the workforce and help support the welfare system.
Statistically speaking, Italy needs 500,000 foreigners a year to support the population, Greece needs 100,000 and Cyprus, where we have one of the lowest birth rates in Europe, about 30,000 a year. It is difficult to predict the end result of the refugee situation in Cyprus, but it is true that the poverty of other countries can help Cyprus.
Antonis Loizou & Associates EPE – real estate appraisers, real estate agents and real estate consultants