Repeated lockdowns, economic shutdowns, and rapid changes in consumer behaviour: there are few sectors that have escaped unscathed from 2020. For companies across the world, this experience has served as a digital ‘tipping point’, prompting them to transform both internal processes and, perhaps more importantly, the way they interact with and serve their customers.
This was certainly the case for the real estate industry in Cyprus, with agents forced to digitalise rapidly in order to maintain business continuity. Now, in the wake of a challenging year, and as we prepare to emerge from lockdown in the near future, what trends and developments can we expect to see in the Cypriot property market – and the real estate industry more generally?
Based on our experience as a PropTech company, we see four key trends to look out for.
Historically low interest rates, and the expected rate of inflation, will mean that property remains an attractive investment. In our own business last year, we sold more than €32m-worth of Cypriot property – a clear measure of the market’s potential despite a challenging environment. What’s more, 756 under-bidders walked away empty-handed from our auctions in 2020, all of whom are actively seeking to invest capital in Cypriot real estate. Their unsuccessful bids totalled €55m – a significant amount of unspent capital, and a further indicator of demand. It’s also worth noting that when we surveyed our buyer database back in October, we found that 85% of respondents intended to purchase a property within the next 6 months, and more than 60% of those were seeking an investment property or holiday home.
Residential Properties will continue to be the most sought-after asset class
Houses, apartments, and residential plots were the most sought-after assets in 2020, and this trend looks set to continue, bolstered by the government’s decision to extend the interest contribution of up to 1.5% for housing loans through the first six months of this year. When considered alongside the recently announced Housing Scheme for Highland and Remote Areas, it is clear that the supply-demand dynamics for mid-range residential units and residential plots within the main urban centres will remain favourable.
Equally, there are other sectors – particularly hotels and other sectors reliant on tourism – that continue to face significant headwinds and will be hoping for a strong summer season to help them bounce back. Looking further ahead, the development of the Limassol casino and the Larnaca marina will have positive effects on the sub-markets in these areas, both residential and commercial.
Digital auctions on the rise
Today's consumers expect quick, efficient, and easy access to goods and services. With the pandemic accelerating digital adoption for many traditional estate agents while also increasing confidence in the online environment more generally, we believe that digital auctions will become increasingly popular. I have personally witnessed the growing appetite for new methods of transacting real estate: just 18 months after our first sale on the island, BidX1 has already become Cyprus’ fastest growing estate agency.
People are more tech-savvy than ever before – and their expectations have changed. Property firms that have adopted a customer-driven, digital approach will continue to gain ground, with virtual tours and end-to-end online transactions becoming ‘must haves’ rather than luxury additions.
Transparency will be the new standard for real estate transactions
While convenience is important for consumers, they are also demanding greater transparency from companies – particularly when it comes to high-value transactions. This is something we’re passionate about at BidX1. Providing all of the information upfront – including the legal documents – and displaying all offers publicly on the platform in real-time ensures that buyers and sellers trust the process. Brands that don’t embrace transparency will be left behind, especially in industries where traditional methods are perceived as opaque and unhelpful to consumers.
Overall, I see many positive indicators for the real estate market. For those seeking to invest, there will be plenty of opportunities. Most importantly, there is now solid ground to finally move the sector to a new level – via digitalization. The events of 2020 clearly indicate that technology and innovation can be beneficial for all the professionals involved in the property sector – from sellers and buyers to estate agents and lawyers. As a new era is upon us, the real estate market must take this opportunity to adapt, to meet consumer demands for greater accessibility, convenience and transparency.
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Kritonas Onisiforou is Head of Property at BidX1 Cyprus. This piece originally appeared in SigmaLive and InBusiness News.
Connect with Kritonas on LinkedIn here, and keep up to date with all BidX1 updates here.
