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Has Nicosia a Real Estate Future?

11 December 2016

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Eleftherias Square 3D Rendering in Nicosia

Could we dare suggest that for the Nicosia region the minimum budget for visas (€300.000 mil.) and for passports (€2.0 mil.) is reduced by 20%? Yes, we can suggest it, but then we will have objections from the other towns.

Nicosia seems to be the poor relative of Cyprus’ real estate market and whoever invests in Nicosia’s real estate market, his chances of success as opposed to other towns are limited.

We have this “New Country” named Limassol, which seems to attract most of the foreign investors, including even Nicosia town’s people who are showing an increasing interest for this town. Ayia Napa will benefit definitely by the under construction Marina (as well as that of Protaras), whereas Paphos with the golf courses, now with the Pafos Marina and the Chinese buyers activity, set out the foundation of future interest. Larnaca who was left behind, seems to be getting on the band wagon of improvement, with the small boutique hotels under construction and others at the planning state, whereas the airport is a major asset for the local economy. The Larnaca port is there, but it will happen at some time, when the Larnaca people decide what they want!!

So dear readers, with Nicosia not being on the beach, what does it have to offer to investors (locals or otherwise)?? You do remember the Qatar deal which would have been for Nicosia a “Marina” with a new “buyers-Arabs” permanent tourists and with royalty to go. We manage to end it, be it, with a good excuse on the estimated land value. Since then and as the Qataries told us it was not worth even €60 mil., the Government is still hoping to dispose of it but no offers are coming.

What has Nicosia to offer other than being the “sit” of the Government? We have tried and tried to persuade our own clients to choose Nicosia as a place of business/residence, but their answer is “we are so near to Nicosia, why not locate at Limassol with its sea views and the cosmopolitan environment”?? There you are.

A couple of high end residential projects are under way in the capital, based, presumably on Limassol’s success story, but we wonder if they have considered their investment based on the two high cost residential units (Nicosia) which did not show a particular success.

So, what has Nicosia to offer in terms of attraction and real estate investment?

Unless something drastic happens, it will remain the poor relative of the other beach locations. Nicosia has the attraction of lower property prices than other towns, but then the local market is primarily based on local demand with limited budgets and many alternatives, whereas the high prices cannot be attained to the extent of other towns (e.g. seaside/sea views etc).

  • We expect that the new square in the capital’s centre will help to an extent and its timing mid 2017 of completion might be of some help for the immediate future.

  • The new museum which is supposed to be a major attraction for local visitors as well as tourists, could help, but again it will happen after 3-4 years (mid-term help).

  • Our proposal of using the old football (Γ.Σ.Π.) ground as a commercial neighbourhood, has not been adopted and instead tenders are sought for a hotel development (no interest) and a large square which will need thousands of euro p.a. for its upkeep.

  • The side casino to be located in Nicosia is also of some help since it will be the only one with gaming tables (other than the main one).

  • The possible solution of the political problem will be an attraction with the freedom of movement and places to visit (at the present within the Turkish held areas). But then if a solution is achieved interest for real estate will be also directed to the “north” and the Famagusta region, which offers the sea and most beautiful beaches and it will be another set-back to Nicosia.

Could we dare suggest that for the Nicosia region the minimum budget for visas (€300.000 mil.) and for passports (€2.0 mil.) is reduced by 20%? Yes, we can suggest it, but then we will have objections from the other towns.

Could we suggest a reduction in Municipal and property taxes (too late now for the property taxes, since it will be abolished next year). Again, reaction as above. Similarly, Municipal rates on business (reduction) and others could be considered. The problem with the reduction is who will fund the difference? We expect however that if a pilot scheme is introduced for a period of 2 years and investment is improved, the loss can be compensation by the added building and business activity.

At the end we do not expect a good real estate future for Nicosia we are afraid.

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