While many people believe that there is good long-term value in the Cyprus property market there seems to be a lack of interest in real estate at this moment in time. Official statistics show that the number of sales in January 2014 fell by 22% compared to January 2013. The Department of Lands and Surveys data certainly casts a very dark shadow across the Cypriot real estate sector with property sales now at their lowest levels since records began back in 2000.
Those who are looking to talk down the Cyprus real estate market have plenty of ammunition with an array of unsold properties, unemployment at record levels and the economy also a focus of concern. In many ways this is the perfect storm for those looking to acquire Cypriot real estate in the short to medium term because all this doom and gloom has certainly affected sentiment and prices.
Domestic v overseas buyers
Of the 293 sale contracts agreed in January 2014, 71% were on behalf of domestic buyers with 29% on behalf of foreign investors. Many people expect the number of foreign investors to increase in the short to medium term with those out with the current situation in Cyprus perhaps a little more upbeat with regards to the medium to long-term potential. There are a number of experts who are concerned that issues relating to Cyprus are being overdone and this is effectively talking down the real estate market at a time when the economy is showing signs of life.
Quote from PropertyForum.com : “Historically, whichever investment market you care to look at, you will see times when every investment adviser is recommending the purchase of shares in a particular company. The fact is that investment advisers and investment researchers very often act like pack animals which…..”
Indeed a comment attributed to the European Commissioner Olli Rehn just a few hours ago praised Cyprus for an economy which is “more resilient than expected”. The fact is there are reasons to be optimistic when looking at Cyprus, if you are prepared to overlook the immediate short-term difficulties facing the country and many others which use the euro. It may seem bizarre, but very often Cyprus is grouped together with the likes of Greece when in reality the financial, economic and the real estate situations in these two countries are very, very different.
Real estate hotspots in Cyprus
In general there has been a steady rate of decline in property sale transactions across many areas of Cyprus for more than 12 months. However, it was interesting to see that there was a slight increase in sale contracts involving Nicosia and a much larger increase in sales in Larnaca. These more positive statistics are obviously overshadowed by the general downtrend and therefore if you are brave enough, lucky enough and do your research, there may well be potential for long-term growth?
It is no secret that a number of EU member states have suffered from the massive decline in tourism which is very important to countries such as Cyprus. There are signs of more interest in the tourism market although we may have to wait some time for a return to former levels because of the austerity movement sweeping across Europe. Will Cyprus property prices move lower in the short-term? Do they offer good value at this particular time?
These are questions you will need to ask yourself if you are looking at this particular market – there are opportunities, there is value but you will have to choose the right time, the right type of investment and perhaps more importantly the right place.