11.07.2022
We often face the question of whether improving the quality of a project will pay off. This is not a simple question, and the answer to it depends, among other things, on what quality is and whether the cost of higher quality is affordable for the general market.
The main quality criterion is the location. The better the location, the availability of utilities, the views, the proximity to urban infrastructure, and so on, the higher the quality.
The second issue is design. There are a number of spacious villas primarily for the Russian market that many other markets, with the possible exception of the Arabs, will not like. Equally important are the amenities provided, such as private bathrooms for all bedrooms, storage room and covered parking.
The third parameter is the cost of materials. Higher quality materials cost more. Double and triple glazing, imported prefabricated kitchens, good quality marble, VRV air conditioners (as opposed to conventional split systems), infinity pools (as opposed to less expensive skimmers), shutters, smart electricity installation, etc. are costly . elements that are taken into account by the market. Security systems are now important, as is the installation of a private elevator in homes above one floor for older residents.
The size of the garden should not be overlooked. Most gardens are not competitive in size; as a rule, houses for permanent residents should have gardens two to three times the size of the house, and those for country houses one and a half to two times the size.
Neighborhood also promotes status, which becomes more important as prices rise. If a good quality house is located in a low-rated area, it lowers its value as it will be much less in demand. Noisy neighbors play their role, whether they are tenants or owners, and even their age.
It is also necessary to consider the management of complex development projects. Good management and maintenance of common areas is of paramount importance. So what if the house is all granite and marble and with gold doorknobs when the project as a whole is abandoned? In such cases, you do not have a good chance of selling the property at a reasonable price.
If residents do not pay their common expenses, numerous facilities turn into a nightmare. Some new developments have spas and other extensive facilities such as indoor pools that are not economically viable in terms of commercial value. At first they are attractive and lead to sales, but if problems follow, then these objects become a burden.
The reputation of a developer matters in smaller countries like Cyprus. A good name, synonymous with reliability and confidence, makes a project more attractive, especially when it does not yet have names and is under construction.
The cost of maintenance should matter more, but it’s not getting its fair share of recognition. The use of maintenance-free or limited maintenance materials should be seen as a big bonus. These materials are usually more expensive, such as exposed concrete rather than stone cladding.
There are two developers in Nicosia (out of hundreds) who are not only selling properties at prices around 25% higher than the competition, but have run out of properties for sale. These two developers are active in the local market, which is much more difficult than overseas. This is the result of most of the points made above and they serve as an example for learning.
Antonis Loizou & Associates EPE – real estate appraisers, real estate agents and real estate consultants
