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BY GEORGE MOUSKIDES
The question is something that is puzzling many interested buyers, especially those looking for apartments or houses.
Over the last 4 to 5 months we have stated repeatedly in our articles that prices, especially in Nicosia and Limassol, have stabilised and there is little possibility of a further reduction. Thus, if somebody decides that they need to buy a property there is no reason to wait.
A variety of reasons are responsible for the stabilisation of prices. Below are the main ones:
— According to statistical data, it appears that sales have improved in the last few months. In October 2009 the reduction in the number of sales in relation to the corresponding month in 2008 was just 27%. This is also apparent from talking with realtors and developers who state that they have begun to make transactions in higher frequency.
— The granting of housing loans by the banks with more favourable terms than before (reduced interest rates, etc.) gives the opportunity to interested parties to go ahead and buy the property that interests them. In combination with the new liquidity that the government will extend to the banks via bonds, the cash flows of the banks are improving.
— The U.K. market has begun to recover and it is a matter of time before it moves out of the crisis. America, Japan and the big economies of Europe are officially recovering and their investment sentiment and psychology is gradually improving which should have a positive impact on the holiday home market in Cyprus.
— The new boost of 60 million Euros that the government has granted to the tourist industry will help attract more tourists next year and will also contain unemployment that has been on the increase over the last few months.
The above are some of the facts that cannot be disputed. What, then, is the conclusion?
For us it is obvious. Whoever is interested in buying property should do so. First, the prices are currently at their lowest point and second there is a wider choice of better properties.
New building permits for new projects have decreased which possibly means that the existing stock of available housing units will decrease. Perhaps, in the near future the choices will be more limited and we may even see an increase in the pressure on prices for housing units.
It may sound strange but in the middle of the “crisis” the prices of commercial property in the city centres have displayed upward trends.
Nobody can predict the exact course of property prices in the future. However we can all acknowledge the improvement in the conditions that exist today compared to six months ago and that will have a positive effect on the mobility of the real estate sector.
George Mouskides is Chairman of the Association for the Promotion of Property Development and Manager, Fox Smart Estate Agency.
