Current affairs Cyprus: We should follow the west in the property market; Industry expert
With the war in Ukraine causing a range of short and long term issues, with the global economy likely requiring years to recover, Cyprus should shift its focus to the West for investment, particularly when it comes to the real estate market, fintech company WiRE FS CEO Pavlos Loizou said on Monday.
“In our view, the age-old
strategy of occasionally focusing on specific markets outside of the European
Union, with significant profit margins, is over,” Loizou said, stressing that
property market professionals should have a more long-term view.
Loizou explained that over the
past three decades or so, the Cypriot real estate market focused on trying to
attract business from the United Kingdom (2000-2008), Russia (2008-2012), China
(2012-2017), and the Middle East (2016-2018) dubbing the approach
opportunistic, rather than aiming for a more sustainable way to develop the
sector.
“As it should be in terms of
politics, we believe that the time has come to act rationally and turn to the
European market”, Loizou said.
While Loizou conceded that the
European market is more competitive, harder to crack and offers smaller profit
margins, it counterbalances these issues with more stability, more security, as
well as its ability to remain largely unaffected by external factors such as
war, and drastic changes in political leadership.
“We must now, as a country, turn
our attention further to the West,” he stated.
Regarding the ramifications of
the war, as well as its resulting sanctions, Loizou said that the Cypriot
property market will likely be affected in both positive and negative ways.
An influx of foreign nationals
from affected countries, including Ukraine, Russia and Belarus, has been
observed in recent weeks, with more than 6,000 Ukrainians arriving to the
island by March 18.
Additionally, there were around
2,300 Ukrainian tourists in Cyprus before February 24, while there are no exact
figures regarding the people from Russia and Belarus who have travelled to
Cyprus in recent weeks.
A large part of the people who
have relocated to Cyprus concern employees who work
in companies that were either based or had operations in the aforementioned
countries.
These relocated individuals have now
been temporarily transferred to hotel units in Cyprus, mainly in Limassol, with
their companies seeking to both protect their staff members as well as their
own business capacity.
This development may prove to
have a beneficial effect on the local economy since those relocated include
younger people with high levels of educational attainment and professional
experience, who may ultimately be integrated into the Cypriot labor market.
“If these people eventually stay
in Cyprus, then they will definitely look for personal housing so we will see
an increase in demand for residential real estate for rent,” Loizou said.
“If the companies that employ
these people also decide that they will continue to operate through Cyprus,
then, at a later stage, there will be increased demand for office space
rentals, again focusing on the city of Limassol, where most foreign companies
are based,” he added.
Regarding any negative
consequences stemming from the conflict, these primarily concern Russian
investors and business people.
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