by Pavlos Loizou
As the demand for real estate in city centers has increased in recent years, Ask Wire's research identifies many parcels of land in the central areas of Cypriot cities that are either underutilized or only partially utilized. The retention of the land/building factor has resulted in a significant increase in both sales prices and rents for residential units - primarily apartments.
Ask Wire, a company that combines real estate expertise with the use of technology analyzed the data in one of Limassol's most privileged areas, the "Papa" area (south of Kolonaki Avenue, near the KEAN factory). It specifically identified the area's buildable land (excluding roads, parks, and so on), calculated the building factor, and removed existing and under-construction buildings. To improve clarity, remove commercial zones and uses so that the figures only apply to residential zones.
1,515 parcels totaling 1,571,729 square meters were identified in the "Papa" area. There are 3,624 residential units in these parcels, with a total area of 450,249 sq.m. Based on the existing planning zones, a total of 1,253,413 sq.m., or an additional 803,164 sq.m., can be built. According to the analysis, only 36% of the permitted factor is used in this area. Based on an average apartment floor area of 100 m2 (plus terraces, storage areas, and so on), an additional 8,000 residential units could be built, representing a 121% increase over the current number.
"Although we tend to demonize any tax in Cyprus, as the market currently stands, taxing idle properties in high-demand areas is the only way to convince their owners to develop or dispose of them," says Ask Wire CEO Pavlos Loizou. Because there are incentives to grant an additional rate, disincentives should be implemented to encourage owners to build them in order to stabilize and make house prices more affordable. Otherwise, supply-constrained conditions will persist, and prices will continue to rise, not only in city centers but also in the periphery, where demand is now shifting, with negative environmental consequences, lost time/hassle for commuting, and the need to develop government services/benefits in new areas, etc. It is understood that the goal is not to tax first-time homebuyers or small property owners, but rather the inexhaustible building rate."
Similar data is obtained for Nicosia's Acropolis area, which will be presented in the near future by the company.
[This article was translated from its Greek original]
*Pavlos Loizou is the CEO of Ask Wire