It seems that the Cyprus property sector will experience a long period of recession and things may deteriorate over the coming three years. Antonis Loizou made his forecasts on the current situation in a recent interview with Stockwatch and emphasised the fact that prices of tourist properties have already fallen by as much as 20%.
Mr Loizou’s forecasts for the property sector are similar to those of hundreds of other businessmen surveyed by Stockwatch over the past few months – and conflict with forecasts prepared on behalf of BuySell that say there is an increase of 10% per annum.
Mr Loizou has one of the largest of historic databases in the domestic property market and his statements to Stockwatch came after the publication of the Cyprus Central Bank’s predictions that the growth rate will fall to 2% in 2009, the lowest since 2003.
He expects that the recession will be longer and deeper than predicted, saying that: “Since the estimates referring to a crisis will come true, in 2009, possibly in 2010 and probably in 2011, prices will drop as those who have borrowed will not be able to bear the burden“.
Mr Loizou said that property developers had frozen their new projects and stressed that “You must be lunatic to build at the current stage since the banks do not lend and a significant number of properties remains unsold“.
Commenting on reports that up 20,000 Cyprus property industry workers face job losses he said that “Dismissals have already started in the seaside towns“.