Predictions for investors
The Cyprus property market is currently entering into a new phase. Some of the higher end property companies in the UK have been searching for property in Cyprus. Unfortunately, they are the type of companies whose agents make large commissions and who are mostly focused on making a profit. The natives of Cyprus are not especially fond of the idea because hospitality has always been the main focus in the communities. The large property companies will also raise the prices of property so that their commissions will be larger. The set amount of properties that the companies hope to sell ranges from 500 to 1000 properties per year.
The stress is on the developers to produce the property that are being demanded. What is worse is the fact that there is already a shortage of land for the developers to build upon. The zoned land is said to run out in around 5 years, meaning that the only properties for sale will be homes that are already built. The planning restrictions for developers include the height and width of the property which reduces the supply of land. In response, the developers are forced to raise their prices because they are forced to make the best of the land they have while still producing valuable pieces of property. As the demand for land increases, the developers will have to keep increasing their prices since the demand for land will be higher. However, it will become harder to rent units or sell older homes.
If the larger property companies are able to achieve the sales goals that they had in mind, they will begin to offer rental solutions for their clients as well. The end result is a larger competition for tenants. While the amount of tourists per year are increasing, it may not be enough to supply the demand for renters in apartments. Apartments are much harder to rent than villas because of their lack of privacy. However, cheaper airline prices have been proposed at the Larnaca airport, so this should increase the amount of tourists seen during the summer months.
In the coming months, the re-sale of a home will be hard to achieve due to the fact that many are purchasing homes off-plan. Meaning that the homes are not finished when the deposit is made. It may also be hard to achieve business for rental units because many investors have opted for the “buy to let” strategy. The most obvious prediction is the increase in prices. As the demand for property becomes higher, the competition will cause the property prices to rise. Be weary of the property you purchase from developers because the land may not be as desirable.
Brief
forecast regarding cyprus investments:
The future outlook is that Cyprus will become a resale property market. The capital growth is said to stay at the current rate which is 15-25% per year.
Those who wish to re-sale a property will have to decrease the price by 10% due to the increase in prices for homes fresh on the market. If you own property in Cyprus that you are using as an investment you still have options.
You can keep things the way they are for the next year and try to sell the property early in 2009 before the supply increase hits, so that you are able to cash in on your capital gains.
You could also keep the property for 5 or more years, by then the newly built properties will have doubled. The large companies who are currently mass amounts of property and then selling them will hopefully have moved on and the re-sale market as well as the rental market will have improved.
