Petros Petrou: Weaker growth prospects, but positive signs for the real estate market

The assessment that the Cypriot economy and the market in 2024 may be headed to more unfavourable growth prospects, unless the situation we found ourselves in last year changes, has been expressed by the Founding Director of Oikos Group, Petros Petrou.

Speaking to InBusinessNews as part of its IN Business Forecasting 2024 series, Petrou points out, however, that the construction and real estate sector has proven in practice that it is the safest and best investment, especially in times of crisis.

And in this context, he appears convinced that there will be a positive movement in the real estate market, which, as he indicates, is already showing a significant recovery.

As the Founding Director of Oikos Group emphasises, in terms of the real estate sector, creating even more investment incentives that will realistically and substantially be responded to, must be considered of particular importance

"The additional stimulation of investment interest should be intensified within 2024, in order to further support the real estate sector, the market and, by extension, the domestic economy," he underlines.

Referring to the Oikos Group, Petros Petrou says that the future plans will soon be announced, which include projects of an identical nature to those planned by the group in recent years and which will encompass several innovations, upgrading the our country’s real estate sector product.

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?

We estimate that the Cypriot economy and the market in 2024 may enter more unfavorable growth prospects, unless the situation we have fallen into in the last year changes.

The crisis in Ukraine, the war in our neighbor Israel, causes lower exports of services than expected, and a weaker growth rate in the EU due to its high dependence on Russian energy.

The crisis has prolonged upward pressures on international commodity, energy, and food prices and this is leading us to a prolonged period of high inflation, with negative effects on purchasing power and real activity.

Risks may also arise from the tightening of financial conditions (to deal with high inflation), adversely affecting the borrowing costs of the state, businesses and households.

Better prospects than forecast could arise due to stronger than expected external demand, especially due to an increased tourist wave in Cyprus from markets other than Russia.

Nevertheless, the construction and real estate sector has proven in practice that it is the safest and best investment, especially in times of crisis. We estimate that there will be positive prospects for the real estate market, which was already showing a significant recovery within 2023.

The biggest and most difficult challenges

What do you consider to be the biggest and most difficult challenges that the Cypriot economy will have to face?

The most important challenge now will be the slowdown in the country's economic growth. The risk of a further increase in inflation will inevitably lead to an erosion of the real income of citizens, with negative effects on consumption, the circular economy.

Unfortunately, due to the various challenges, the additional inevitable undertaking of additional social measures to support the population by the state due to the continuous inflationary pressures, may cause destabilisation in the state's finances.

Also, the possible effects of the increase in migration flows and the difficulty in attracting new investments due to the negative publications, are major challenges.

Would you say that, taking into account the latest upgrades, it is now well on its way to growth?

I believe that we are not on a development path as a country and the reasons are listed above.

Real estate as the safest investment

What do you think will be the course of the sector in which you operate in 2024?

We cannot predict with certainty the course that the sector in which we operate as a company will follow. There is a slight recovery in the domestic real estate and construction market.

Nevertheless, in our opinion, real estate is the safest investment even in the difficult times we are experiencing.

What are the biggest industry trends/changes you anticipate in 2024?

As far as the real estate sector is concerned, the creation of even more investment incentives, which have - realistically and substantially - a prospects of suceeding must be considered of particular importance. Already, a number of incentives have been announced for the attraction and arrival of companies in Cyprus, and other incentives should be granted that benefit our entire country.

The additional stimulation of investment interest should be intensified within 2024, so as to further support the real estate sector, the market and by extension the domestic economy.

The most significant problems for the 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?

Cyprus must act as a financial centre and continue the immediate moves to strengthen the services sector and therefore the construction sector.

The problems have existed over time and are summarised as follows:

1. Several legislations date back to the beginning of the last century, most of which are copies of other countries that updated them over time.
2. Bureaucracy in almost all public bodies. The public service is one of the main pillars for the proper functioning of the state apparatus.
3. Stabilisation and modernisation of the banking sector.
4. Reports of tax increases and fee increases, causing volatility and uncertainty for investors.

The plans for Oikos Group and technology

What are your organisation's plans/strategy for 2024?

We will soon announce our future plans which are of the same nature as the projects our group has been planning for the past few years, which will include several innovations and the upgrade of our country's product.

Our vision is for Periyiali Resort to become the best residential and tourist destination in the Mediterranean and to remain unchanged. This is a priority for us.

Our goals are fully aligned and harmonised with our vision. We will continue to work vigorously and consistently to complete this undertaking.

What role does technology, such as artificial intelligence, play and what changes is it expected to bring about in your field?

We believe that technology is the key differentiating factor for various businesses, as the country will turn to support this sector to increase the activities of technology companies in Cyprus.

Companies will make significant investments to achieve future growth. Changes, new technological means will change the way the construction sector works.

(Source: InBusinessNews)