* by Antonis Antoniou
The real estate sector has always been a key pillar of the Cypriot economy. Undoubtedly, every change in the work cycle of the industry affects the data of the whole economy, the labor market, but also the standard of living and prosperity of the citizens. At the same time, it is a common finding that each time period brings with it new challenges and opportunities - sometimes unpredictable, redefining the terms of the bets that must be won.
Challenges
Reduction in demand due to corona
The rapid spread of the coronavirus and the restrictions applied on the Asian continent are already affecting the Cypriot economy and consequently the real estate market. Due to the deadly epidemic, the decline in the flow of property buyers from China is expected to intensify further. In this context, the companies that focused their promotions on this market, are expected to be significantly affected. In addition, it is a convergent view that if the problem does not subside by the second quarter of the year, it will be extremely difficult to make up for lost ground.
Pressure on the Cyprus Investment Program
Strict restrictions on the Cyprus Investment Program (investment through naturalization plan) are expected to reduce real estate sales. Real estate worth more than € 1 million, which was designed for investors who would participate in the Program, is expected to receive the most pressure. Limassol and Paphos are estimated to be more affected than other cities.
Improving the business environment
There is an urgent need to crack down on bureaucracy, simplify procedures and modernize laws, structures and practices. International competition is fierce and any setbacks are simply pushing investors to more business-friendly destinations.
The real estate market, which in recent years has been plagued by unpredictable instabilities and external factors, is called upon to redefine its course, addressing new challenges and seizing the opportunities that arise.
Chances
Extroversion
The extroversion of the sector in new markets is of key importance. A variety of ways need to be found and attractive incentives given to keep the real estate market attractive to foreign buyers. Foreign investors are the blood donors of our economy, with a huge contribution to productive industries. The "key" to this effort is flexibility and versatility.
Emphasis on quality
Special emphasis should be given to the quality of the works, the overall design, the architecture, the quality of the materials and the refinement that will characterize them. In combination with the comparative advantages that Cyprus has as an investment destination, the factor "quality" adds value to the product we offer.
Negative Interest rates
Local buyers are in a way the winners of the developments, as they gain access to attractive investment opportunities due to the discounts and incentives offered by land development entrepreneurs, in the light of the new data. As a result of the negative interest rate policy, many Cypriot depositors choose to invest in real estate, due to the fact that they are considered low risk and maintain stable returns.
In conclusion, it is necessary to study in depth the new data and market trends and through a collective effort to achieve the best possible result for the economy of Cyprus. We are called upon to work methodically and creatively, to develop higher speeds and to correct any distortions, so that the industry remains a locomotive of the Cypriot economy.
* CEO Giovani Group