Korantina Homes CEO: If you invest in Cyprus, invest in property by the sea

George Ioannou, CEO of Korantina Homes, explains why the local real estate market remains a safe, profitable and high-return investment sector.

How would you describe the investment outlook for Cypriot real estate in 2023?

The last decade has been the most challenging period ever for the property market in Cyprus and the industry has gone through significant changes and fluctuations during this time Exactly ten years ago, the banking sector went experienced the most shocking crash in its history and, consequently, the property market was heavily impacted. The investment programmes that were introduced at the time balanced the market situation considerably and provided additional liquidity to the real estate industry. However, the COVID-19 pandemic, which forced all the international markets into ‘on-hold mode’, the unexpected scrapping of the Cyprus Investment Programme and the conflict in Ukraine have greatly impacted the real estate market, causing even more fluctuations. So, the trends in 2023 will be both global and local, with the war in Ukraine continuing and influencing economies and prices, while sanctions and banking regulations imposed on Russian citizens are ramped up further, and presidential elections in Cyprus. However, even if some of these developments have a negative effect on the real estate market, I strongly believe that growth in 2023, especially in the first half of the year, will continue as it did during similar crises in the past.

The pandemic and geopolitics have created a challenging environment for investors everywhere. Why should someone invest in real estate in Cyprus?

Real estate has always been one of the most popular, stable and versatile defensive assets and Cyprus is especially attractive to foreign investors, thanks to its business-friendly and transparent legal framework, fantastic growth potential and political stability. The market is currently volatile and influenced by external factors but not to the same extent as other sectors. In my opinion, it is the least-affected sector and this is why, when an economic crisis is expected, bricks and mortar are often the safest investment option. Any real estate asset is tangible and, even if it experiences depreciation, this will only be temporary. Having said this, the real estate sector in Cyprus is even more stable, as the country offers a full package of lifestyle and investment advantages and strong demand for real estate is created by both local and international buyers.

What trends do you expect to dominate the market over the next decade?

The demand for exclusive properties by High Net Worth Individuals will definitely continue and become even stronger in the coming years. Exclusive properties are defined as properties in the best locations, offering a vast variety of services, privacy and safety to home owners.

How can the sector respond to the challenge of environmental sustainability while remaining profitable?

Sustainable, eco-friendly real estate has gained in popularity in recent years. The construction of contemporary buildings with sophisticated energy efficiency classification, using alternative sources of energy such as photovoltaics to reduce the consumption of fossil fuels, and the implementation of modern, effective insulation materials are now a must. This has, of course, raised the cost of construction and consequently increased prices, even though some this growth is being absorbed by the developers, wherever possible. The benefits and cost savings are much greater for the buyers in the long run, as sustainability helps to significantly reduce operating expenses, leading to a lower total cost of ownership.

If a long-term investor, looking for returns with a 10-year+ outlook and willing to invest €1 million in real estate in Cyprus, were to appoint you as his/her investment consultant, how would you advise him/her to structure the portfolio?

The advice is very clear and straightforward: if you invest in Cyprus real estate, invest in a property next to the sea! The supply of such properties, especially modern luxury properties, is very limited but demand is continuously rising, even when the global economic outlook is projected to slow down. The large number of foreigners living permanently in Cyprus and rising interests worldwide are driving long-term rentals up, while millions of holidaymakers visiting Cyprus every year are creating a stable demand for short-term leases. Real estate is by far the safest option for investment, it offers high yields and can be easily liquidated if needed and capital gains are considered certain.

(This interview first appeared in the February 2023 issue of GOLD magazine. Click here to view it.)