Oversupply in Cyprus market: problems and prospects
The Cyprus real estate market was popular before the Coronavirus pandemic, but now the demand for objects has decreased and there is an oversupply. The activity on the part of foreign investors has decreased, which was caused by quarantine restrictions and the global crisis in general.
Cyprus has a program of receiving investments in exchange for citizenship. According to it, the applicant needs to purchase real estate in the amount of 2 million euros. A large number of objects were built to implement the program, which can now be left without owners. Quarantine restrictions led to the fact that buyers physically could not come to the viewings. After the opening of the borders, foreigners also did not hurry to invest in local real estate, as they were concerned about the instability of the global economy.
Luxury properties in Cyprus are primarily aimed at foreign citizens, because local people are unable to buy expensive housing.
Experts say that many villas and apartments will remain unsold for a long time. The reason for this is also the reduction of submitted applications for the investment program. The number of people willing to obtain a Cyprus passport last year decreased by about 60% compared to previous periods. If in 2019 there were 600 such applications, in 2020 – only 200. The maximum value in the history of the program is 700.
This situation has a negative impact on developers who expected activity from foreign investors. The majority of applicants are citizens of third countries, where the level of epidemiological danger remained high for a long time, and communication with them was limited. As a result, sales volumes have significantly decreased.
Since the end of summer, entry into Cyprus was allowed to Russians and their families who have residence permits or who have received a permit from local authorities. At the same time, they were required to have the results of the coronavirus test and quarantine within 2 weeks.
Experts hope that the activity on the real estate market will significantly increase by the middle of this year. Many investors are planning to buy housing in the country for permanent residence. Among these, the Lebanese stand out, the number of which has grown significantly in recent years. They are looking for elite apartments and villas to move in.
Russian investors also expect to get Cyprus citizenship, and their activity has increased at the real estate market. The country has a large amount of supply, which still prevails over demand, but analysts predict that the balance will soon level off.
According to statistics, only in the region near the coastal strip of Limassol is currently under construction or planned to sell about 3 thousand premium apartments.