A recent report by the international auditing company PWC on the state of the Cyprus property market aroused great interest. It refers to a decrease in demand for real estate, which we expect will fall even more in the near future.
In the real estate sector, the number of transactions decreased by 55% in the first six months of 2020. In the coastal cities of Limassol and Paphos, attracting mainly foreign investment, there was a drop of 65% and 61% respectively. The Nicosia real estate market, which is mainly based on local demand, has shrunk by 31%. And for luxury real estate worth more than 1.5 million euros, demand fell by 78% over this period.
Unemployment is rising and numerous companies are experiencing financial difficulties. The effects of the pandemic make it clear that the future does not look so rosy.
Cyprus receives assistance from the EU in the amount of 1.2 billion euros. But this loan is issued on the condition that the government will carry out a number of reforms. However, it is difficult to do this in a timely manner, since the government does not have a majority in the House of Representatives.
Meanwhile, some dignitaries, including the Auditor General and some of the European MPs, are keen to accuse the country of economic mismanagement and corruption in front of the international media and the EU. This has a massive impact on the island’s business sector.
A recent example is related to the transfer of the headquarters of a Forex company from an Arab state to Cyprus. Such a move was strongly recommended by the company’s employees, but rejected by the management in the US, who said that Cyprus was not included in their plans.Petty politics and a self-promotion mentality end up hurting the economy.
Another factor we have to deal with is bad publicity. Cyprus has been hit with major investments such as casinos, Wargaming and most recently the Ayia Napa marina.
Who dares to risk their investment in Cyprus, where decisions are based on volatile politics and not on economic criteria?
As we know, Cyprus has limited opportunities for mainstream economic activities other than the tourism industry and real estate. The medical sector also makes a significant contribution to GDP, as does shipping. The restructuring of the economy is mandatory.
The island’s mentality has once again come to the fore due to the coronavirus, with many locals refusing to be vaccinated, including a large percentage of doctors and nurses. For this reason, Cyprus is blacklisted by the main tourist markets, the UK and Russia. The increase in the number of reported cases of coronavirus, from 200 to 800 a day, was shocking.
A country whose people care about their own interests is not a country whose future can be discussed.
Some 20 years ago, a demonstrator placed a bucket in Eleftherias Square for passers-by to spit into it to express disgust at the actions of the political parties of the time. Is this what we should repeat?