In Limassol we don’t have a general plan. The decision on the construction of the high –rise buildings are being taken by local municipalities. On one hand, construction will give the economy a boost. On the other hand would completely change the look of the coast for the rest of residents of Limassol.
On the exploration that Hellenic Bank conducted in half a year in 2017, property prices are rising, and the coming months are a good time to invest in real estate, especially in housing for permanent residence.
Internet for most is the most important tool in finding real estate listings for potential buyers, but specialized agents also are still considerable.
The survey was conducted throughout Cyprus, with the participation of 600 respondents aged 18 to 70 years.
Period of holding-March 2017 & onwards. Artist: Pulse Market Research commissioned by the Hellenic Bank.
Profitability of housing for rent
Each quarter the Cyprus branch of the Royal Society of certified Surveyors (RICS) publishes statistics on the prices and income from real estate. In the last report, the following rates of return in the category of residential flats with the area 120 m2: Recoil (or yield) is the income (gross) per year in comparison with the market value of the property.
Larnaca 4.13%, Limassol, Nicosia 5.29% 4.03%.
2014-3.8% 3.9%-2915, 2016-4%, 2017 (forecast)-5%.
Revenues do not reflect shortfall in rent, property taxes, periods without renting, general expenses and so on, and this is not entirely correct. If you compare local revenues with the internationally accepted, the ones in the Cypriot real estate should be reduced by approximately 10-15% to get a clean yield percentage real estate from its value.
In terms of profitability, Limassol has good performance, but the lower-priced apartments, rather than at the top. In General, there is a growing demand and income from rental in all cities (and particularly in Limassol). If accommodation brings approximately 4 per cent of gross revenue or net (before tax) of approximately 3.5% is a good indicator, taking into account the trend towards growth and favorable forecasts for the development of the construction sector, which has just started to revive (although, in General, and slow).
We bring to your attention a table of real state profitability in recent years. Its rates are not strictly fixed, and may vary depending on many factors. As can be seen from this table prepared by the Cyprus Office RICS the level of profitability in these periods (2010-2016) was not subject to any particularly strong fluctuations. It is clear, however, that higher incomes are inherent to categories of high-cost investments that entail a higher investment risk and uncertainty, as well as more substantial operational and administrative costs. For them, the yield is about 6-6, 5%; in particular, for hotels this figure is above-10-12%. It should be borne in mind that any investment must be evaluated individually, taking into account the age and quality of the object, its prospects and so on. The less attractive the property, the higher the yield is expected.
After 2013 large investors, mainly foreign, for some time demanded the return of 6-7%, but with the economy since 2000 expectations fell to 6%, and now to 5.5% (we are talking about objects of commercial real estate).
The most advantageous for today are investing in real estate for rent in the summer season in the area of Protaras-Paralimni. Villas in this category tend to 3BR and not far from the sea, has a yield of more than 8% even after the deduction of 20-25% for operational and administrative costs. High efficiency rent such villas due to recovery in the tourism sector, which in turn is the result of the decline of the markets in Egypt and Turkey. However, once those markets start to revive, Villas could lose their appeal today.
Short-term renting of villas for rent, usually not declared for tax purposes (even though it is illegal), as tenants leave do not receive any benefits from it. At present, the demand for such short-term rent increases.
As an example, RICS generates a villa with three bedrooms (not on the first line) in Protaras, which rent for €2 500-000000 3 per week (in high season) and approximately €2 000000 per week in winter season, with total lease term of six months. The more attractive real estate and the closer to the beach it is, the longer the total term of the lease and, naturally, the more revenue.
At the same time, on the first line Villas 4BR are up for rent for €3 500-000000 4 per week (high season) and for €2 500-000000 3 during the winter season. It should be borne in mind that the amount of total income should be deducted approximately 25% of the associated costs, agency fees etc.
For those planning an attachment on larger amounts in the housing category “buy to rent, good opportunities are provided in the context of the sale of mortgaged property otchuzhdjonnogo banks. Potential investors are offered the whole housing complexes (even at the stage of unfinished construction).
Let’s hope that this situation will continue for another two or three years, that will be an added incentive for the local construction sector.