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Cypriot Buyer psychology on a roller coaster ride

Published on 30th March 2016

Cypriot buyers

Different camps of thought put forward positive or negative factors regarding the economy and the real estate sector in Cyprus, only to serve their purposes and designs.

Cypriot buyer psychology is affected and buyers are trapped in doubt by the ever-changing composition and dynamism of these factors in the media.

Flipping through the pages of newspapers you catch yourself reading about the same story and understanding different things. It is as if one newspaper paints the story in blue and the other in red, the result being that buyer psychology is painted solid black.

Based on political party plans, especially just before elections, all is up for gambling in the casino of votes. The good of the economy is not to anybody’s interest. Populism and party patriotism reign supreme. Notions like unemployment and standard of life concern nobody.

All these realities discourage potential buyers who keep changing their mind, expecting a stabilisation of the status quo. It seems that politics and the economy are indeed adjoining vessels.

We will list the factors which play a positive role in the thinking of Cypriot buyers:

  • Following a sharp decline since the middle of 2008, real estate prices seem to be have stabilised over recent months, as indicated by Central Bank and RICS indicators
  • The monthly volume of sales is at a low level but a steady rise is being recorded
  • The island’s economy has been recording a growth for almost a year as a result of the EU economic measures.
  • Further reforms expected in the public sector, Limassol’s port, CYTA, etc should further boost the economy
  • Banks have lowered their loan rates and claim they are offering more loans to their customers. Lower rates are an extra breath of life to many customers with existing loans.
  • Buyers are now spoilt for choice as there are numerous properties on the market.

Over-emphasizing the factors below affects buyer psychology negatively leading them to avoid any property transactions:

  • Strikes in the government or semi-government sector, which politically motivated more often than not, is a negative parameter
  • Labour unions and other organized groups oppose any reforms that would help the economy
  • Many interested buyers expect mass foreclosures and a consequent drop in property prices, something we don’t believe will materialise
  • Media overexposure of the possibility, or lack of, Cyprus problem developments, Turkey’s stance on the issue and the Syrian refugee crisis, all help deter potential buyers, wondering if it is worth owning property on the island
  • The huge number of non-performing loans renders questionable the stability of the banking system and its ability to finance growth
  • While taking greedy politicians to court for financial scandals seems positive, it also serves as a reminder to potential buyers of the instability and corruption of the whole system

Both the positive and negative factors playing in the media on a daily basis put a hold on potential Cypriot buyers, who have both the will and the cash to back it up.

They shop around but never go the distance. Who can blame them?

Georgos Mouskides

By: George Mouskides

       Director FOX Smart Estate Agency

       Chairman Cyprus Association of Property Owners (ΚΣΙΑ)

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