For those lucky enough actually to get a loan from a Cypriot bank, the increased interest rates will seriously raise the cost of their property. “The increase in interest rates is also a deterring factor for those who do meet the requirements for a loan. Of course, banks cannot stop loans 100 per cent so they do give them out to people who meet requirements. These people, however, will think twice as interest rates are higher,” Protopapas explained.
The situation is further strained by the fact that the foreign buyers, who boosted Cypriot real estate to begin with, are now liquidating their Cypriot properties to deal with the economic crisis. “The global crisis has to a large extent affected Cyprus as we had a lot of buyers from the UK and Europe who bought their second residence on the island. These people are now selling these properties, which has raised the availability of properties. However, demand has been reduced,” Protopapas added.
There are, however, those who believe that the current crisis will in the long run have positive results as it will stabilise previously sky-high prices and control the number of developers. “The crisis could have good results in the long run as prices will stabilise and the solid professionals who survive it will be able to continue in the sector. Plot prices had been raised significantly, which had forced us to raise flat prices. This may stabilise with current conditions,” explained Kinnis.
