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Will the real estate market collapse?

The Cyprus real estate market is currently not threatened by either a bubble or a possible collapse. This statement was made by the head of the Association of Real Estate Appraisers, Polis Kurousidis.

The expert believes that there are no prerequisites for this. Foreign investors buy Cypriot real estate using their own funds. Cypriot buyers who take out a loan to purchase real estate can only do so after a thorough check by the bank.

When asked to comment on the fact that prices today are quite high compared to 2010, Mr. Kourousidis said that from the 2007-2008 market bubble until 2010, prices rose very little. Then, until 2017, prices tended to decrease, and since 2017, growth has resumed. The positive side of this is that the market no longer relies on debt and especially unregulated lending.

Kourousidis noted that the arrival of foreign investors in Cyprus can be considered a blessing, even if it pushes prices up. “Foreign investors trigger a whole chain of benefits. Obviously, developers who build real estate properties benefit from them. This then benefits the government, which collects taxes. If foreigners move their companies to Cyprus, this means that they will need employees, hence there are benefits to the labor market. If foreign workers come and live in Cyprus, a number of other businesses will benefit from this as these people will be visiting restaurants, shopping, walking and having fun here. There are enough advantages,” the expert noted.

According to Kourousidis, by region, Paphos is developing quite successfully, as it attracts foreign investors and buyers. Prices here are stable, but tend to rise. Limassol has been showing an upward trend in prices for many years. Larnaca has also been growing significantly recently, attracting many foreigners. As for Nicosia, it is one of the most stable markets not only in Cyprus, but also in Europe as a whole.

The Chairman of the Association of Appraisers believes that investment in real estate remains a profitable direction. “You can buy real estate on the secondary market so that VAT is not charged upon purchase, and have a stable income from it. On the other hand, with an increase in interest rates on both loans and deposits, this trend may weaken somewhat,” the expert noted.