Hadjipanayiotou: How the housing problem can be solved as demand continues its upward trend
Maria Karaiskou 08:53 - 22 January 2024
The CEO of Cybarco Development, Michalis Hadjipanayiotou, has emphasised the need to address the real estate sector’s serious problems for Cyprus to emerge as a regional business and investment destination.
In an interview with InBusinessNews, in the context of "IN Business Forecasting 2024," Hadjipanayiotou expresses his assessment that demand will continue its upward trend, influenced mainly by ICT companies choosing Cyprus as their headquarters
At the same time, he indicates that the state should intervene in the housing issue, a problem that is plaguing a large percentage of our fellow citizens in Cyprus, pointing out that this can be solved by increasing the supply of real estate which has the greatest demand.
As Hadjipanayiotou explains, increased supply will reduce costs, enabling those interested to rent or buy a property at more affordable prices.
Noting that the road for the real estate sector will also be long and full of challenges in 2024, the CEO of Cybarco Development also expresses the certainty that the entrepreneurs who are active in it have all the necessary resources to be able to lead Cyprus a step further towards the desired goal.
In other words, to become capable of playing a new regional role in terms of investments and entrepreneurship, strengthening the economic development of the country even more.
How do you see the economic environment shaping up in 2024, in light of inflationary pressures, high interest rates and unpredictable ever-changing geopolitical developments?
The challenges for the Cyprus economy will continue to exist in 2024, although the estimates for the new year seem to be encouraging. The International Monetary Fund as well as the Ministry of Finance of the Republic of Cyprus predict that there will be a positive growth rate (2.7% and 2.9% respectively), with the "messages" about inflation also being positive as it seems that there will be a reduction in the coming months.
Of course, this should not make us complacent, on the contrary, I would say that we should be prepared for every scenario, as " we have active war fronts in our neighborhood," which intensifies the uncertainty.
For the real estate sector, in which Cybarco Development operates, we predict that demand will continue its upward trend, mainly influenced by ICT companies choosing Cyprus as their headquarters.
The fact that an increase in real estate sales was recorded in the previous period, with a percentage of around 50% coming mainly from foreign buyers, is also positive.
As far as the local market is concerned, it is still affected by high lending rates, which I believe will soon change, since the forecasts indicate a reduction in the next period, which will lead to an increase in purchases by Cypriots as well.
What do you consider to be the biggest and most difficult challenges that the Cypriot economy will have to face?
The main challenge is high interest rates combined with geopolitical events.
In particular, if lending rates continue to remain at high levels and the current geopolitical events continue into 2024, this will inevitably have a negative impact on both businesses and households, which will have an impact on the Cypriot economy more broadly.
Would you say that, taking into account the latest upgrades, the Cyprus economy is now well on its way to growth?
Although the current geopolitical events keep us all on our toes, I consider the recent upgrades of the Cypriot economy by international rating agencies very positive.
Such ratings improve the image of Cyprus as an investment destination and attract foreign capital, which further strengthens our economy.
The goal of making Cyprus a regional business hub
What do you think will be the course of the sector in which you operate in 2024? Will it move with a positive or negative direction?
Looking back to 2023, I can say with certainty that the real estate sector has maintained and further strengthened its role as an important pillar of the Cypriot economy.
Despite constant challenges and changes, the land and building development industry has demonstrated remarkable resilience and resilience.
Proof of the positive results of 2023: Contribution to GDP in excess of 15% and a 19% increase in real estate sales compared to 2022, with 46% coming from foreign buyers.
These results are due on the one hand to the firm foundations of the sector, and on the other to the flexibility and reflexes of the entrepreneurs in the sector.
The incentives granted by the state to attract foreign companies to Cyprus, so that they transfer their headquarters to our country (headquartering), seem to be bearing fruit, with the results being obvious.
At the same time, the new profile of Cyprus which combines modern and environmentally friendly residential and commercial properties, golf courses, marinas and modern office spaces, have created an attractive environment with prospects of prosperity for locals, visitors and the investors.
These prospects can be further enhanced if we manage to resolve significant issues facing the land and building development industry.
It is my belief that through the cooperation of all involved bodies as well as the Ministry of the Interior, we can achieve even more in 2024.
After all, our goal is common: The emergence of Cyprus as a regional business and investment hub, and by extension the well-being of Cyprus and its people.
What are the biggest industry trends and changes you anticipate in 2024?
I would say the creation of residential projects/destinations, with services and facilities that will make the lives of residents more comfortable.
Also, more and more companies operating in our industry will proceed with greener developments by adopting ESG criteria.
In the next period, we will see more environmentally friendly, more energy efficient and technologically equipped projects being created, which will meet all the modern requirements of real estate buyers.
The problems surrounding the real estate sector
What are the most significant problems that are currently plaguing your sector and the solution of which you consider to be a priority in view of the new year?
In order to achieve our emergence as a regional business and investment destination, we need to address serious problems facing the industry.
The time-consuming system of real estate permits and securitization needs immediate change as it is a brake on development and investment. The introduction of new, modern, fast and digital processes must be an immediate priority.
At the same time, we need to address the very serious issue of labour shortages by drawing up a new strategy for workers from third countries.
At the same time, we must strengthen the transition to green constructions as well as the effort to achieve the goals of Fit for 55.
We know very well that in 2024 the road for the real estate sector also will be long and full of challenges.
But we also know that the entrepreneurs who are active in it have all the necessary resources to be able to lead Cyprus one step closer to the desired goal: To become capable of playing a new regional role in terms of investments and entrepreneurship, further strengthening the economic development of the place.
The land and building development sector is committed to continuous growth, attracting large investments and creating new jobs.
We are here to continue building Cyprus. Let's build the future.
Increased supply will reduce the cost of real estate
If you could ask the government to take specific measures or formulate policies to support/enhance your sector, what would they be?
I would say that it is very important that the government moves forward with simplifying the procedures and delegating responsibilities for some procedures to non-governmental organisations, which will be decisive in both the time and cost of completing them.
The state should also intervene in the housing issue, a problem that plagues a large percentage of our fellow citizens in Cyprus, with rent increases and real estate purchase prices making securing housing from difficult to impossible.
This can be solved by increasing the supply of real estate which has the greatest demand.
The increased supply will reduce costs, enabling those interested in renting or buying a property to be able to do so at more affordable prices.
Cybarco Development in 2024
What are your organization's plans/strategy for 2024? Should we expect new developments and your further consolidation in the market?
Cybarco Development is preparing for the delivery of the two front towers and the 6,850 sq.m. public square. at Trilogy Limassol Seafront.
This is another success story for us, as a new, integrated community is in the works.
In addition, in 2024 we will seamlessly continue work on the completion of the third and final building - 75% of which has already been sold - which forms part of the second phase of the development and includes a private oasis for residents.
The new year will also see our team of experienced professionals set up to manage rentals, properties and common areas offering clients five-star hotel and lifestyle management services.
With the great success of our projects Attikis Residences in Nicosia and Thalassa Residences in Limassol, our company has secured land in prime areas of both cities, where new projects will start within the year.
Finally, in the most idyllic area of Cyprus, near the Akamas peninsula, with only two ready-to-deliver seaside villas available for sale, we have decided in the near future to proceed with the construction of four more.
Investment in new technologies
What role does technology, such as artificial intelligence, play and what changes is it expected to bring about in your field?
The field of real estate development is completely connected to the field of technology, in terms of planning, implementation and all actions of promotion and sales.
As a company, we have invested in new technologies and programs that support and facilitate the completion of our goals and the quality of life of the people who work for us and our customers.