Ukrainian refugees push up property demand

Ukrainians fleeing to Cyprus to escape the war have pushed up demand for real estate rentals in Limassol and Paphos, say industry stakeholders.

The Interior Ministry said the Republic had welcomed 2,935 Ukrainians since Russia invaded Ukraine on 24 February, with the majority seeking to reunite with family already living on the island.

In comments to news site Stockwatch, the Cyprus Real Estate Agents Association (CREAA) head, Andreas Kaouris, said that demand from Ukrainians is sending rents upward in Limassol.

Kaouris said that demand from Ukrainian refugees had accelerated a rise in rents, as the ongoing war in Ukraine has further spiked inflation.

He argued that eventually, the war would make things harder for the real estate sector to recover after two years of being hit by the coronavirus pandemic.

Real estate agent and member of the Board of Directors of the Association of Real Estate Appraisers, Andys Tilemachou, said: “In recent days there is uncertainty and confusion in the market” over a mix of increased demand for housing and worry about the future.

Tilemachou said no one could estimate how much damage the war would inflict on the island’s real estate market, as no one can predict how long the conflict would last.

“Usually after the end of a war, the neighbouring countries benefit as people leave the area of “the conflict”.

He believes Russians and Ukrainians leaving the region will settle in Cyprus due to their relations with the island and its status as an EU member.

Paphos real estate agents have also reported increased demand for real estate from Ukrainian nationals.

A local real estate agent, George Petrou, said there is a high demand from Ukrainian refugees who want to settle in Cyprus and are looking for an apartment or house for rent, with the help of their relatives who already live in Cyprus.

“Demand from Ukrainians is increasing day by day. The demand is usually for higher-end property.

“When it comes to demand from locals, there is a stock of older homes which are significantly larger than the newer flats and houses, at a much lower price,” said Petrou.

While Limassol and Paphos are enjoying a jump in demand for real estate, towns along the coast have witnessed limbo in the real estate sector due to the war.

Vassos Zakos, a real estate agent active in Famagusta and Larnaca, said the war caught stakeholders off guard. They expected to see the market recover following two years of uncertainty inflicted by COVID-19.

“Even if the war ended today, if the price of fuel and other essential products did not return to normal levels, market uncertainty would continue with negative consequences for all sectors.

“If the price of petrol rises to 2 euros per litre, then people will be more reluctant to buy or rent property”.

Zakos also commented on the reduced supply of apartments and houses for rent observed in recent years in Larnaca, as new properties on the market are only for sale.

He said increased demand and the reduced supply of real estate for rent are detrimental factors for the town’s development.