Real Estate - Where We Stand?
Maria Pastella
Real Estate, Real Growth I Training Leaders, Building Futures | Head of FS & BD at RE/MAX Cyprus
The current situation is absolutely a first timer for most of us and it's very brutal. An expected slow down heads for a recession. Most countries are on lock-downs, paused almost all operations except the essential ones. My hope is that it will go as fast as it came! The real estate market definitely is affected. The overall transactions are nationally down comparing to last year for the first three months. The losses depend also on the duration of the virus globally. April will be very harsh as well. Even if Cyprus manages to fight and eliminate to the least the infections and spread of the virus earlier than other countries, almost 50% of the Purchasers of properties are foreigners. It’s not only that they cannot travel physically they are actually really skeptical. The rest of the purchasers are locals where many will face unemployment issues and salary deductions most probably on the long run. The market will go down before it goes back up, and it will go up. So inevitably the supply will be more than demand and we will shift to a buyers’ market and the prices will come to the best case scenario at a correction.
But is there, when the prices fall that some investors come in and make the best moves. I have experienced the crisis of 2013 in Cyprus and I was involved with investors who bought in 2015 and by 2018 they have seen an increase on the value of their properties from 25-35% sometimes more. Timing is everything. The signs are always there if you are watching closely. It is also from the safest investments one can make. The Cyprus market bottomed in 2013 and skyrocketed in 2018, in just five years. So as a small country with the correct and immediate moves we will recover sooner. We need though to be very careful when getting back to the new normal slowly to able to manage it. I believe that the fall of the prices will balance the market. It is a much needed correction as, at some point the prices of the properties weren’t attractive enough for investors and locals.
Where we stand now?
According to the data from the Land Registry Department of Cyprus comparing the years 2019 and 2020 for the months January, February and March and the total transferred/sold properties and the total accepted amount for transferred/sold properties.
Cyprus 2020:
January
Total Number of Properties Transferred / Sold: -6%
Total Accepted Amount: -22%
February
Total Number of Properties Transferred / Sold: +10%
Total Accepted Amount: -22%
March
Total Number of Properties Transferred / Sold: -55%
Total Accepted Amount: -55%
Famagusta:
January
Total Number of Properties Transferred / Sold: +24%
Total Accepted Amount: -2.5%
February
Total Number of Properties Transferred / Sold: +10%
Total Accepted Amount: -21.5%
March
Total Number of Properties Transferred / Sold: -25%
Total Accepted Amount: -7.5%
Larnaca:
January
Total Number of Properties Transferred / Sold: +3%
Total Accepted Amount: -6%
February
Total Number of Properties Transferred / Sold: -9%
Total Accepted Amount: -16.5%
March
Total Number of Properties Transferred / Sold: -50%
Total Accepted Amount: -61%
Nicosia:
January
Total Number of Properties Transferred / Sold: -10%
Total Accepted Amount: -31%
February
Total Number of Properties Transferred / Sold: +16%
Total Accepted Amount: +4%
March
Total Number of Properties Transferred / Sold: -55%
Total Accepted Amount: -67.8%
Limassol:
January
Total Number of Properties Transferred / Sold: +7%
Total Accepted Amount: -16%
February
Total Number of Properties Transferred / Sold: +4%
Total Accepted Amount: -20%
March
Total Number of Properties Transferred / Sold: -60%
Total Accepted Amount: -65%
Pafos:
January
Total Number of Properties Transferred / Sold: -26%
Total Accepted Amount: -33%
February
Total Number of Properties Transferred / Sold: +3%
Total Accepted Amount: -17%
March
Total Number of Properties Transferred / Sold: -64%
Total Accepted Amount: -31%
*The numbers of the total properties transferred / sold are different from the Purchase agreements deposited at the Land Registry Offices for all cities.
When we will be back on track?
My estimate is probably until the end of June, we will be able to significantly reduced or cancel the measures taken for Covid-19 and be able to fully operate but carefully. The virus seems that will be around for a while so our first priority is health. Viewings and meetings will be different..The market will not be the same as we expected or predicted. Although my personal opinion is that the real estate market needs incentives to recover fast and we will discuss them on my next article. This year is almost lost.. if we are lucky to start seeing the light in the tunnel in September. Of course this depends strongly on the duration of the virus.
What do we do now?
- At first let's stay positive because we can if we choose to
- Is it the first crisis you are experiencing? Learn from it! It's my third one..
- Is it going to be the last? No, for me that I am 32, I will probably have 4 more crisis to experience
- Learn to appreciate the good times of work and make the most out of it in order to be prepared for the next one
- Try to see the changes that happening..who knows? Maybe you will find yourself somewhere that will change your life for the better.
If you liked my article please give me your feedback, it's my first one. Any expression or comment will help me improve!
Also if you have a certain topic that you would like more insights feel free to suggest it.
Stay Safe,
Maria
Real Estate Developer at chaps property developers ltd
4 年Very Good Article simple to the point well done
Business Development
4 年Buy when everybody is fearful, sell when everybody is greedy!
Country Manager at ELEVAY
4 年“Learn to appreciate the good times of work and make the most out of it in order to be prepared for the next one” Totally agree Thank you for sharing
Cyprus Branch Manager at Reach Immigration
4 年Great article. However, i disagree with any comparison betwen the first 5 months in 2019 with any other period that Cyprus has experienced or will experience. After declaring that there will be changes to the program on 15th of may 2019, a queue of 3 years pending potential investors has decided either to proceed being serious potentials and converted in purchasing a property or they decided that Cyprus programs are not for me (during these 5 months). Keeping in mind that Cyprus RE developers promoted the changes very well worldwide and made a propaganda about it. In my humble opinion, it was the worst period to buy a property in Cyprus within these 5 months. Going back to your article, I believe RE market will come back to recovery very fast as there will be "word of mouth" marketing from the investors who are obtaining the citizenship these days who already applied in 2019.
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4 年Congratulations on your first LinkedIn article, its great! Thanks for sharing :)