17.07.2022
Changes have taken place in the real estate sector of Limassol. Recently increased demand in the local housing market is gradually shifting the interest of developers to the construction of more affordable real estate, largely putting aside the creation of luxury complexes.
Analyzing current trends in the real estate sector ahead of the second Limassol Business and Investment Summit held at the Parklane Luxury Resort in Limassol late last month, Imperio Founding Director and Deputy Chairman of Cyprus Land and Building Developers Yiannis Misirlis noted that the period pandemics and recent events related to the war in Ukraine have stimulated demand for more affordable real estate, while at the same time, interest in luxury residential real estate remains stable.
“The arrival of many foreigners – professionals and non-professionals – in Limassol, combined with an increase in the purchasing power of local residents and attractive financing programs offered by local banking institutions due to low interest rates, created a significant demand for real estates designed for the average buyer,” Mr. Mr Misirlis.
Commenting on the fact that Cypriot real estate in previous years was focused exclusively on the creation of luxury real estate, Mr. Misirlis explained that in the period after the 2013 banking crisis, many potential buyers were forced to reconsider their plans and turned into tenants. Then the demand from local residents for the purchase of real estate dropped sharply, which switched the interest of developers to foreign markets.
This development, added Mr. Misirlis, left the local market untapped. “We have left a big gap in which some companies in the sector have recently turned their interest again,” Mr. Misirlis emphasized. He added: “Imperio is one of the first companies to refocus on this part of the market, which is why the first phase of our Sunset Gardens residential complex in the western part of Limassol, a gated residential complex with over 320 apartments, addressed to this part, was commissioned this month . to the buyer category.
Two-Piece Solution for High Rent
Director Imperio also touched upon the rental market, confirming that rents are currently at their highest level in recent years. As he explained, rents in Cyprus were already high due to a reduction in the supply of suitable properties. However , he added, recently this phenomenon has intensified due to the resettlement of many foreigners (Ukrainians and Russians due to the war, etc.) to Cyprus, especially to Limassol, and on the other hand, the preferences of many millennials, who are the youngest group tenants who remain as tenants for a much longer period of time.
In laying out his position on the proper way to stop this phenomenon, Mr. Misirlis opposed some groups’ proposal for rent controls because, he stressed, such a thing would create two-speed properties, putting an end to any owners plans for refurbishment. “This will certainly deter future investment in the real estate market as returns will be limited.”
The director of Imperio expressed the opinion that in order to solve the problem, the state should give appropriate incentives that will encourage the private sector (private investors) to invest more in properties that are in great demand, such as apartments with an obligation that they will be rented out within a certain period of time, for example 10 years. Similar tax incentives are offered in many European countries.
At the same time, in order to reduce the demand for rent, Mr. Misirlis proposes to introduce purchase assistance plans to encourage current tenants to buy their own property. “The goal should be to enable tenants to buy their property, thereby turning them into landlords. Such programs are working successfully in a number of European countries such as Germany and the UK and I think it would be a good idea to study these examples in order to create our own Cypriot program to help stop the upward trend in rents in this way,” concluded Mr. Misirlis. .
