Real estate experts in Cyprus are growing increasingly concerned about the ongoing conflict in the Middle East and its impact on the island’s property market.
Recent trends reveal a shift in the housing market:
Experts agree that if the conflict in the Middle East escalates further, Cyprus may see an influx of refugees. This would likely increase demand for rental properties, causing rental prices to rise due to limited availability. In fact, Limassol’s rental market has already witnessed a surge in demand, and experts believe rental costs will continue to climb in the coming months.
Another concern among industry professionals is the shift of local developers toward commercial real estate. Numerous office buildings are under construction throughout Cyprus, leading to fears of an oversupply in this sector. Some projects may even remain vacant if the market becomes saturated.
Additionally, there has been an uptick in competitive practices between Israeli and Cypriot developers. Israelis are particularly focused on developing areas near Limassol’s new casino, which is becoming a hot spot for investment. Local developers are optimistic about further market growth by the end of the year, especially with Cyprus’s anticipated accession to the Schengen zone—a promise made by President Nicos Christodoulidis.
Property Dynamics in Nicosia, Larnaca, and Paphos
In Nicosia, the real estate market remains predominantly driven by Cypriot buyers, but the number of foreign investors is steadily increasing. The appeal for international buyers stems from relatively lower property prices in the capital. Currently, the market is balanced with a healthy supply and demand, keeping prices stable. However, should the Middle East conflict worsen, Nicosia could also see an influx of foreign buyers, especially from Israel and Lebanon. Fortunately, experts believe there is enough supply to meet demand without causing a major market disruption.
In Larnaca, Israelis have long been the leading foreign buyers, but the Lebanese have recently overtaken them. These two groups are not only investing in individual properties but also developing entire complexes, including commercial ventures, especially in areas like Dhekelia and Oroklini. While Israelis currently hold a dominant position in the market, Lebanese investors are catching up. If tensions escalate between Israel and Lebanon, Cyprus may see a surge of refugees seeking temporary housing, particularly in Larnaca.
Finally, in Paphos, both property prices and rental rates are experiencing a steady increase.
Source: stockwatch.com.cy, dom.com.cy