Cyprus Real Estate Market Faces Challenges, Urgent Government Intervention Needed
Introduction
Cyprus Real Estate Market – Real estate experts have issued a warning about the growing difficulties in the real estate market, labeling it a “giant problem.” The impact of external factors, such as inflation and high interest rates, is being increasingly felt by both consumers and constructors. Marinos Kineyirou, Chairman of the council for the registration of real estate agents, emphasized the need for government intervention in this critical situation.
Kineyirou highlighted several factors contributing to the problem, including rising construction material prices, high interest rates, and inflationary pressures. These factors, individually and combined, are putting significant pressure on the purchasing power of citizens. Consequently, many individuals are reevaluating their plans to buy a house or apartment.
Moreover, the upcoming regulations regarding the five percent VAT on the acquisition of a first home are expected to impact demand further.
The European Central Bank has been steadily increasing interest rates since March 2022, raising them from -0.50 percent to 3.25 percent, with more increases anticipated. In Cyprus, the interest rate for housing loans surged to 4.67 percent in March of this year, up from 2.16 percent a year ago.
As a result, more people are turning to renting, but the rising demand is also placing a heavy burden on the public. Kineyirou lamented the unfortunate circumstances and people’s desperation, citing instances where rents have escalated from €500 to €700 or €800 once rental contracts expire, leaving individuals struggling to cope.
Conclusion
With the situation heading into uncharted territory, Kineyirou emphasized the urgent need for government involvement to address the problem. He called for a reevaluation of the state’s housing policy, tenancy regulations, and the provision of houses and apartments for vacationers, including short-term rentals like Airbnb.
Article Credits go to – Andria Cades (Cyprus Property News)
