Navigating Challenges In the Real Estate Market: Insights and Outlooks for 2024
Navigating Challenges in the Real Estate Market
Market Challenges in 2023:
Geopolitical conflicts and supply chain disruptions impacting the Cyprus property market. Lingering effects from the 2020-2021 pandemic and the Ukraine conflict casting a shadow. Significant interest rate hikes by the European Central Bank until October 2023. Elevated construction material costs compared to pre-pandemic levels.
Resilience Amid Challenges:
Despite difficult conditions, real estate sector showcased resilience in the face of adversity. Data from the Department of Lands and Surveys indicated positive trends in property transfers and sale agreements in the first nine months of 2023.
Impending Market Downturn:
Fourth quarter of 2023 expected to show figures reflecting a market downturn. Soaring property prices identified as a primary factor influencing demand, both domestically and internationally.
Housing Affordability Concerns:
Eurostat findings show a decreasing percentage of Cypriots able to acquire their own homes. Rising living costs, high property prices, and elevated loan costs impact housing affordability. Young couples seeking loans for property acquisition deemed financially unsustainable by banks.
Rental Market Challenges:
Increasing trend of individuals returning to parental homes due to challenges in purchasing or renting. Rental prices reaching levels requiring a monthly wage for accommodation. Property owners opting for short-term leases exacerbating the rental issue.
Expectations for 2024:
Anticipation of market-driven property price reductions in 2024. Some property owners making movements toward offers and discounts to stimulate buyer interest. Uncertainties for 2024 due to conflicts in Ukraine, developments in Gaza, and disruptions in the supply chain.
Supply Chain Concerns:
Houthi attacks in Yemen affecting the Suez Canal, disrupting the supply chain. Repercussions of reduced ship transit through the Suez Canal expected to impact the Cypriot economy, particularly the real estate market. Potential increase in raw material and construction supply prices could keep property prices elevated, especially for newly built properties.
Article Credits go to Kyriacos Nicolaou – Cyprus Property News
