In our article in January, we have proclaimed that on average Cyprus real estate market will remain relatively stable in 2021 while in the first quarter of 2021; both the number of sales and values might see a slight reduction before re-entering a period of steady recovery through the remaining year.
By taking into consideration as a guide the positive outlook in other property markets such as EU, UK or even USA, and by relying on the prevailing market conditions of the Cyprus property market it seems safe to consider that 2021 will be a year of stabilization.
Here are some reasons that supports the stable-positive outlook of the Cyprus Property Market:
- Pent up demand from the pandemic shutdown.
- Travelling restrictions are reduced and foreign buyers gradually return back to markets.
- Lack of attractive alternative investments. Stock market is highly volatile and interest rates on deposits are negative.
- Rents are and will remain relatively resilient in the coming months and years. Hence, supporting even further the motivation of buying.
- The number of properties listed for sale are down compared to last year.
- Currently there is excess buyer demand over supply.
- New construction projects are delaying to commence.
- Property-owners are sceptical whether to sell. They anticipate a more favourable sale price if they wait.
- The stock of properties for sale from Banks has been also declined over the last years considerably. NPLs have decreased from nearly 50% to just under 20%.
- Unemployment is projected to fall by the end of this year.
- Despite the economic contraction, EU, UK and USA property markets in both number of sales and prices have seen an increase of about 1% – 4% (quarterly, monthly & in annual basis).
- By considering the existing trend on Cyprus property sales (seasonally adjusted): The total number of sales for 2021 are estimated to reach 8,000 – 8,500 which forecasts an increase by around 3%.
- Furthermore, according to our in-house website statistics; By comparing the January-February-March 2021 with October-November-December 2020, the results reveal that the asking price of our statistical standardized house coming to market increased by 1% while the standardized apartment increased by circa 0.6%. Although, this statistic is subject to several limitations; it at least shows a basic indication of the asking prices.
There is a great consensus among the leading property research companies worldwide, that the global property market is and will remain at least stable for 2021. Moreover, according to European Commission’s latest report on February 2021; the real GDP of Cyprus is forecast to grow by 3.1% and catch-up to its 2019 levels by 2022.
The property market isn’t known for being simple to predict. Values are also difficult to assessed let alone in this uneven market conditions. Available properties for sale are getting fewer and competition harder to beat out. We only recommend top-notch Chartered Surveyors who can help you to qualify whether a property is overall worthwhile or suitable for your goals; before making any offer or any commitment of buying. To the potential sellers, since supply is low at this time and the choices of buyers are limited, there is much less competition that seen in typical real estate periods making this era an efficient time to sell.
About the author
Charalambos Pitros is a PhD holder in Real Estate Economics and Member of the Royal Institution of Chartered Surveyors (MRICS) and of the European Real Estate Society (ERES). He is a Real Estate Investment Consultant and Valuer at Zyprus | Property Valuers & Estate Agents.