.
By Antonis Loizou F.R.I.C.S. – Antonis Loizou & Associates Ltd – Real Estate Valuers & Estate Agents
The post-2013 disaster has brought about a change of the rental scene of
However demand for purchase is still low and this has caused demand to be directed from purchase to rentals, whereas buy-to-let is nowadays a rarity. In general, we could say that residential rentals increased by 10% over the last year, whereas good quality properties in attractive locations reach a more than 15% rental increase. This is a trend that we expect it will continue as economic circumstances improve.
In terms of
The Nicosia and European universities in particular, which are English speaking, attract foreign students (as well as locals) and they have reached over 20,000 students, whereas the Greek speaking University of Cyprus has only 8,000 students (and with an abundance of supply) mainly locals who are quite mobile by comparison to the foreign ones. The announcement of the creation of a medical school by the
Students halls have been developed recently, whereas others are at the design stage (estimated approximately 500 units in the pipeline) but still demand is expected to exceed supply. This shortage of student accommodation has drawn the attraction of foreign investors as well, ranging from Chinese to British investors, directing their interest at
Expected residential returns are nowadays in the range of 4% other than students hostels, which can reach 6% and there will be an increase of rentals and returns over the immediate period of 2 years (hopefully as more units are being built, so the pressure on accommodate will ease, but as we have said for certain locations supply will not meet demand).
Limassol is another “country” altogether. The town centre has benefited considerably for the Technical University (TEPAK) which undertakes the lets itself, making it more attractive for investors, whereas the large number of foreign employees and tenants have reached rental levels of approximately 30% more than that of
Larnaca is slighter at a lower level than that of
Each town has its own infrastructure and attractions, with Limassol with its cosmopolitan living and the seaside promenade in Larnaca Phonikoudes area and the improved beach facilities have helped.
Villas-to-let is another source of rental which is experiencing a sudden upsurge of demand and the top market being the Famagusta region is the tops at the Protaras and Sotira area which yields/returns show an average of 8% net (after let expenses and running cost are deducted). To this end the shortage of tourist beds as well as the upsurge of tourist demand is a case in hand for this.
Paphos is at the end of the preference regarding rents and the market is mainly directed towards short lettings as opposed to other towns where lets are for long lets (of 12 months-plus).
Regarding apartment units of the small size is on the top of the demand list.
For letting properties make sure that the common expenses are included in the rental income, so that you do not face surprises at the expiry of the lease, whereas villa-to-let and AirBnB (the latter of an increasing interest at this point of time) have an increased management time and effort.
For those with money and time in their hands letting residential units can be an attractive business, be it for a number of units in one building, or in various buildings and locations but within the central locations).
Returns from real estate in
I refer to returns/yields which is the income received p.a. as a percentage of the current value of the property (not its historical cost). In
For us Cypriots real estate has its own “personal” attraction which makes it more attractive against other nature of investment “you can see it, walk in it, live in it, watch it grow and care for it etc” as opposed to deposits and shares which are “lifeless”. This attraction for real estate has been “exploited” to the U.K. with London residential properties are most popular by U.K. Cypriots (and some locals) where returns are higher (around 6%-7% – London) but if one is to compare the two Cyprus-London, you must bear in mind the much higher initial investment involved, the tax situation in each country and the possibility to pay death duties.
P.S. Regarding returns for the high end residential properties which nowadays sell at EUR 4,000/sq.m. (
