Limassol rent rises spiral upwards

Property rents in Limassol have increased by around 25 per cent over the past two years, much higher than other cities in Cyprus resulting in many locals being priced out of the market.

RENTS in Limassol have gone up by around 25 per cent in under two years, way higher than other cities in Cyprus and leaving ordinary Limassolians increasingly priced out of the market. According to real estate consultant Antonis Loizou, an average two bedroom flat two years ago cost €400 a month. By 2017, it was averaging €460. It is now €500. “If we’re talking about flats near the coast – add another 30 per cent to these prices,” he told the Sunday Mail. A post on a Facebook group from someone looking for a decent flat for €300 near the beach drew a series of exasperated ‘good luck’ comments and pictures of someone looking far into the distance with binoculars. Online searches show rents at staggering figures – anywhere between €1,000 and €2,500 for a two-bedroom apartment. Contrary to other cities which attract foreigners, Limassol is an upmarket destination, Loizou added. “It isn’t like Protaras which has people visiting only for the summer,” Limassol is attracting people for more than just entertainment but work. “New hotels are being built, the casino is going to be there, cruises are arriving at the port – all these investments bring money,” Loizou said. Also home to shipping companies, forex companies and international banks Limassol has attracted foreign nationals with a lot more cash in their pocket whose demand for a place to stay is bringing up prices, clashing with those on average Cypriot wages. “A German for example working in the shipping industry in Cyprus, doesn’t get a salary of €1,500. He gets anywhere between €2,000 – €3,000 reflecting the income he would have in Germany. He therefore can afford to pay more rent.” This pushes prices up, pricing out those on an average Cypriot salary. The university in Limassol, Tepak, coupled with other commercial activities have all contributed to the increasing demand. According to Loizou, a two bedroom flat in Engomi, near the University of Nicosia costs around €600. Near Tepak, however, the average rent for a similar flat is about €750. Limassol has also become a major magnet for those taking advantage of the citizenship-for-investment scheme. This has had a knock-on effect on the rental market even though the main focus is property sales. “The passport scheme has 100 per cent contributed to the increased demand,” said Loizou. The investment needed for citizenship in Cyprus is for €2 million if the investment is made solely in residential real estate, at least a quarter of which must be spent on a residence for life. If not, the threshold is €2.5 million, at least €500,000 of which must be spent on a permanent residence. A lot of this money stays in Limassol, Loizou said. “The developer will make profit, the construction company, the land owner, the builder,” they then have more purchasing power. Chairman of the Royal Institution of Chartered Surveyors (RICS) Thomas Dimopoulos put forward another reason for the increase in rents in general: the difficulty of obtaining loans to purchase a house. “Although the situation has greatly improved lately (particularly after the 2013 crisis), criteria for loans are quite strict and restrict many (potential) property buyers,” he told the Sunday Mail. “Those without capital, cannot buy property. Demand for rentals increases and rent prices go up.” This is also seen in figures that show between 2007 and 2017, 80 per cent of residential purchases were apartments and 20 per cent were houses.