Cyprus real estate stricken by pandemic
The Cyprus real estate sector will take a significant hit from the COVID-19 pandemic, as in times of uncertainty investors tend to minimise property transactions, experts argue.
With the novel coronavirus threatening to usher another recession, just 12 years after the last one, investors generally tend to be more sceptical and less willing to jump into agreements especially regarding real estate.
Nikolas Ioannou, from the Property Studies & Valuations Dept of Danos / BNPRE Groups, said: “This will result in a significant slowdown of the market in Cyprus, especially now that it has officially recorded coronavirus cases”.
He told the Financial Mirror that this could be devastating for the Cyprus Real Estate market, which is mainly supported by foreign investment and demand, a decent percentage of which comes from the Chinese market.
This compounds the devastating effects to the property market on a continuous downtrend since the implementation of stricter criteria on the ‘Cyprus passport scheme‘ introduced in May 2019.
Already the market has started to record a significant drop in sales at the start of the year.
“Out of 742 properties sold in January this year, 30% was sold to non-EU residents. Sales to non-EU residents were down by 20%,” Ioannou said.
“Add to that the massive volume of new supply that has either just entered or is expected to enter the local market in the coming months as well as the thousands of properties the banks have repossessed and need to dispose of,”he added.
Ioannou said the short-term rental market, such as Airbnb, with thousands of properties, is expected to suffer from wholesale cancellations if the outbreak continues. Already cancellations have started to come in.