The company WiRE FS, which is an independent real estate asset management and advisory firm, carried out an analysis indicating the trends prevailing in Nicosia in recent months. Here are the main conclusions.
- Stability in real estate demand and prices in Nicosia and Limassol, with downward pressure in the other cities due to their reliance on overseas demand and sizeable exposure to the tourism sector.
- Increased demand from locals for residential real estate, mainly apartments, utilizing the government’s interest rate subsidy incentives to create new sources of income.
- Demand by occupiers is for Class A offices, while that for lower quality office space is declining.
- Repricing across the coastal cities, except Limassol, is underway and is expected to accelerate if tourist arrivals and spending do not recover in 2021 (the year is already considered by many to be lost) and in 2022.
- The general conditions that prevail (approximately €19 billion of non-performing loans, public debt over 100% of GDP, very high and costly liquidity in banks) create the risk of ‘Japanisation’ of the economy, i.e. a prolonged period of low growth rate and deflation in real terms.