Cypriots have always been emotionally identified with their land and real estate, which is why they often prefer to invest in assets that have a return, rather than intangible investments such as shares and bonds, notes Antonis Antoniou, CEO of Giovani Group. He notes that the Cypriot market today offers attractive investment opportunities, due to the fact that many professionals in the industry have improved the product they offer, both in quality and design.
Having entered 2020, what prospects do you see in the real estate sector?
I am convinced that there will be a slight decline in the interest of foreign investors and buyers, due to the pressures we have received on the Cyprus Investment Program, which has been a driving force of the industry for the last five years. It is a common finding that the intense political controversy and uproar caused, both domestically and internationally, have damaged the image and reputation of our country as an investment destination. The scandal caused more damage than we initially estimated, as industry professionals. In addition, the new strict procedures of the Central Bank and the commercial banks, which concern matters of due diligence and control, create in some way additional difficulties for investors. The reaction of market forces to the new data is expected with interest, regarding the possibility of replenishing losses from new or alternative markets.
There seems to be a turn of the Cypriots again towards the real estate sector. Where do you think it owes?
The zero interest rates offered by banks for their deposit programs and in some cases the negative interest rates, lead more and more locals to invest in real estate. Cypriots, I would say that over time they are emotionally identified with their land and real estate. Therefore, quite often they prefer to invest in assets that have a return, rather than intangible investments such as shares, bonds, etc. The Cypriot market today offers attractive investment opportunities, due to the fact that many professionals have improved the product they offer, both in quality as well as in design. In addition, the continuous increase in rents in almost all areas of Cyprus, now offers a stable monthly income, which in combination with the increase in market values, make real estate the first choice. Finally, the liquidity of banks and their willingness to offer loans for residential development, have a positive effect on increasing demand.
Is there a sufficient supply of real estate that meets the needs of Cypriot buyers at the moment in the market?
The market offers a variety of quality options from the hinterland to the coast. The options are many for all wallets. Compared to ten years ago, one would say that today we have a market that offers commercial, tourist, residential or development real estate but also land of all types and preferences.
You are a company with a particularly strong presence in the free province of Famagusta, where traditionally the Cypriot consumer bought real estate for holiday purposes. Do you see this trend coming back?
In the last two years, with the increased demand for seaside houses and apartments, the industry and consequently the region are recovering and rejuvenating. The interest is lively and growing. Cyprus has established itself as an attractive and quality tourist destination, while at the same time it is known that Cypriots choose Cyprus for their holidays. Therefore, those who have the opportunity, show strong interest in buying a holiday home mainly in Protaras and Ayia Napa.
What is the data today with foreign buyers? The data of the Land Registry show that after May there has been a significant decline.
This is due, as I have mentioned, to the great blow that the credibility of the Cyprus Investment Program received. The political leadership must finally understand that the absolute approaches to this issue only succeed in damaging the image of Cyprus. Several countries offer the same Program, so irresponsible approaches will simply send stakeholders and their investments to other countries. It is a given that the Program has made a substantial contribution to the effort to develop the economy. It has created thousands of jobs, while several sectors of the economy benefit directly and indirectly. It is also important to mention that the competition benefits from what is irrationally happening at home and certainly does not miss the opportunity to drag our country with the republishing of negative news. It is only worth noting that Turkey, in 2016, presented an investment naturalization program, which is implemented with great success and is aimed at investors from Asia and Russia. In addition, the special agreements that Turkey has concluded with the United States and Great Britain for the purpose of residence or relocation of Turkish nationals in these countries, make the Turkish passport particularly attractive. In 2019, investments in Turkey under the Program reached an astronomical amount of 10 billion. Therefore, responsible approaches are needed, because communication cannibalism also affects the national interest.
How do you expect the course of the Cyprus Investment Program from now on?
It will take time, perhaps three years, to regain confidence in the system and the country. It's a normal development before we get back to 'business as usual'. Until then, the program will be in recession and under testing.
More responsible to buyers
What new to expect from the Giovani Group in the near future?
Careful development in coastal areas is what we can best support and that is what we will pursue in the medium term.
Has the way land development companies operate today changed? What are the priorities?
All land development companies that have survived the financial crisis have radically changed their business philosophy. Adaptation to modern market data was imperative. We have become more "sensitive" and more responsible to buyers and I would say with certainty that our constantly competitive environment "pushes" us to improve the product we offer without necessarily raising the price.
Philenews / Insider