Cyprus’ real estate sector is unsure how recent developments in the wider Middle East will affect the immediate future of the property market.
While immediate attention is naturally fixed on the ongoing military operations and the humanitarian aspect of the Israel-Hamas conflict, property stakeholders anticipate how events might lead to future investments in Cyprus by Israelis.
These investments could encompass land, real estate developments, or even business relocations, potentially resulting in new price increases for property purchases and rentals.
However, drawing concrete conclusions now is challenging, say real estate agents.
In comments to Phileleftheros daily, Panos Danos FRICS, CEO of DANOS International Property Consultants & Valuers, suggested the impact on the domestic real estate market hinges on the duration of the crisis.
“A swift resolution may lead to milder effects, allowing for a bridge period in combination with the typical market time lag.
“If the situation stabilises, the impacts may be less severe,” said Danos.
He noted the Cypriot market was on an upward trajectory, partly driven by foreign direct investment in various property sectors.
Danos said a possible downturn in the international real estate market might affect Cyprus, a hot spot for investors before the Israeli crisis.
“Cyprus is regarded as an attractive investment destination with favourable opportunities, competitive spreads, and returns compared to more mature European markets,” said Danos.
“Whether property prices and rents will be able to stabilise amid inflationary pressures while waiting for the storm in Israel to pass remains uncertain.
“Additionally, it’s worth considering whether an influx of Israeli investors and businesspeople, who might be seeking opportunities outside of Israel, will play a role in bolstering Cyprus’ real estate and construction sector”.
Pavlos Loizou of Ask Wire argued there hasn’t been a notable surge in interest from Israelis in Cyprus following the crisis.
“However, the situation is expected to change within the coming weeks, both in terms of rentals (1-12 months) and property purchases (6+ months) in Cyprus,” said Loizou.
He added that historically, cities like Limassol, Larnaca, and, to a lesser extent, Paphos have seen the most significant interest from Israeli buyers.
“Possible increased demand from Israelis might result in property price increases for both rentals and purchases.
“Short-term accommodation platforms like Airbnb could also experience heightened interest”.
He added that due to the timing of the conflict, at the end of the tourist season, many properties that typically have low occupancy rates are expected to be rented out.
“It’s still too early to draw any definitive conclusions in this dynamic and evolving situation,” said Loizou.
