K. Athinodorou: Property prices and the new reality

The increased price of construction materials coupled with the added costs from keeping in line with green transition regulations, climate change risks and interest rate hikes have created a new reality in the real estate sector, according to Kikis Athinodorou, the Director of Kikis Athinodorou & Associates LLC.

During his speech at the 17th Real Estate & Construction Conference and Exhibition, Athinodorou gave a historical overview of how real estate prices have progressed since 1995, and how they are expected to be impacted in 2023.

As he said, up until 1992, property prices in Cyprus were relatively low in proportion to the average income. However, when the Cyprus Stock Exchange bubble burst in 1999, there was a sudden increase in real estate investments, which launched the upward trend prices have followed since. “The huge crisis from the stock market bubble was followed by a return to the familiar investments in real estate. It’s just that this turned into an obsession which slowly but surely pushed the prices up,” Athinodorou explained.

The year 2008 saw the highest increase in demand for real estate, but also their prices, of the past 40 years. Then the 2013 banking crisis happened which led to a haircut on people’s deposits, which in turn led property prices to drop. However, the pandemic led to a change in buyers’ behaviour and preferences.

Which leads us to the current situation, Athinodorou said. He said we are now faced with a new reality, with high construction costs, additional expenses because of the green transition and climate change risks, on top of increased interest rates.

And he said the industry is now trying to find its footing amidst a global banking crisis and international instability.