Cyprus
Sergey Smolensky, CEO of Empire Property Cyprus
I believe that after the stabilization of the pandemic situation in the world, real estate prices in many southern countries will remain at the same level and Cyprus will not be an exception. Hoteliers unanimously point to a two-fold decrease in hotel occupancy in the next year and a half. This is due not only to the current situation, but also to the fact that many people, for security reasons, based on considerations of social distance, will prefer to rent apartments or villas in the private sector, where it is much easier to organize meals for themselves.
Even before the pandemic, the Cyprus rental market did not have enough volume for everyone, and after the opening of the air service, real estate for rent will be extremely scarce. Already, companies and individuals who own and rent out housing in Cyprus, as well as many of those who previously put their property up for sale, are actively updating it. Investors who want to purchase real estate in demand for rental have also become more active.
It is also worth noting that in the last few months there have been many potential buyers in Cyprus who previously had not considered buying real estate abroad. But after analyzing some points related to the current situation in the world, people decided to purchase a second property as an investment. And Cyprus, like no other country, is ideal for such purposes - it's the sea, the climate, the cuisine, and much more.
Most Cypriot developers now adhere to an optimistic forecast - in 2020 prices will remain at pre-crisis levels and there are no reasons for their fall. The only exception may be elite-class real estate and illiquid secondary, which has been on sale for months or even years. Even before the quarantine, it was very difficult to find liquid apartments or houses on the secondary market of Cyprus, if this happened, then such real estate "flew away" in a couple of days. Prices for all the facilities offered by our company also remain at the same level. Well, of course, no one canceled some discounts or bonuses when signing a purchase and sale agreement. They have always acted and will continue to act.
Kirill Ravchenko, Director of DOM Real Estate
The cost of real estate in Cyprus remains stable in any situation: the crisis of 2013 and problems with deposits, the approach of a Turkish drilling vessel to Cyprus, a dust cloud, lack of water, a change in the passport investment program and more -every time all buyers started saying that now everything will collapse in price, but this did not happen. Also now: we have a large number of customers who are ready to buy objects for -30% of the cost, but no one meets them halfway, at most they are given a discount of 10%.
It is important to remember that in difficult times in Cyprus, very powerful state support is turned on, benefits are paid to non-working citizens, loan payments are canceled until the end of the year, eviction of tenants is prohibited and payments for commercial real estate rentals are stopped, and there is also a purely island fact. If something is not for sale, then raise the price.
I will note the mentality of the inhabitants of the country: Cypriots can try for years to rent a real estate object for 3,000 euros, while being able to rent an object for 2500-2700 euros, but stubbornly refuse to do so. The concept of "no money" is simply missing here. As for the purchase of real estate in the current conditions, developers are now making discounts, but no more than 10%, since construction has stopped, and state subsidies have been sent to developers, with which they feel comfortable.
There will definitely be no price drop, there will only be a small adjustment for illiquid objects with an inflated value. And here again, it makes sense to pay attention to the local mentality - if the Cypriot owner has at least one viewing per week, then he believes that he has already practically sold the object and will not care about somehow conceding in price.
Yannis Illiadis, Company ManagerFoutina
Of course, talking about a price drop of two or more is not very reasonable because of a couple of months of quarantine. Prices decrease significantly after a serious crisis that lasts at least a year or two. Of course, at the moment there are some discounts on new buildings, as well as free legal support, payment for tickets, hotels, furniture and household appliances as a gift, but this is valid now only to attract customers. The situation has not changed in the secondary market, sellers simply understand that the country will open in the near future and everything will return to normal fairly quickly.
Yanina Osipova, Manager of Cyprus Resales
It is not worth expecting that real estate prices in Cyprus will decrease significantly, so far the volume of sales and the number of completed new buildings have fallen. The price correction will occur in about 6-12 months and it will depend on the duration of the quarantine, as well as the speed of resumption of flights with the main countries for Cyprus - Great Britain and Russia. And the calmer the media will react to the situation, the more confident the majority of the population will feel.
Montenegro
Anton Shamarin, Managing Partner of Value.One
The duration of the quarantine itself, as well as a combination of economic factors and consumer sentiment at the time of exiting it, will affect real estate prices in Montenegro, this will affect both buyers and developers and developers. The cost of construction under quarantine has increased, especially since the construction sector is the only one in Montenegro that was allowed to work during quarantine. All the construction projects started in Montenegro are actively functioning. With the restriction of international trade in such conditions, the competition of developers for both building materials and labor has intensified in conditions when some foreign workers returned home to quarantine. This has influenced the growth of the cost of construction.
Thus, with an increase in the cost of construction, the margin of developers will decrease even in the absence of changes in real estate sales prices. This suggests that in the absence of debt obligations to banks and the absence of pressure to sell real estate at low prices, developers and developers will prefer to wait. And even in the face of a potential decrease in consumer demand, they will not lower the price, further reducing their margin, and they will not sell at a loss. Deferred demand can also play an important role after the opening of the market. Those people who were interested in buying before the quarantine, as well as during it, will also arrive after the opening of the borders, and will support real estate prices in the short term.
It seems that neither developers and developers, nor individual sellers will massively reduce prices for their properties. At the same time, like any other negative event of an economic (and not only) nature, quarantine will undoubtedly entail some volatility in the prices of individual offers on the market, under the influence of the above factors - the economic situation and the emotional mood of individual sellers. We will undoubtedly see customized "hot" offers on the market, as is usually the case in such situations.
Svetlana Zamotina, Director of the company DOO Tradegoria
In Montenegro, real estate prices remain at the same level. The local housing market is primarily focused on the foreign buyer. Now the borders are closed and there is no point in prices changing. But there may be exceptions: some developers individually consider the possibility of reducing the cost of real estate and installment conditions. In addition, according to forecasts of the local government, Montenegro will weaken quarantine measures, and during May it is expected to open all small and medium-sized businesses, tourist infrastructure (hotels and restaurants), which also gives reasonhomeowners should keep the price bar at the same level. There is no talk of opening borders yet, but even if Montenegro opens its borders only in July, then even during the shortened summer period, revenues for the season will make up for the losses incurred by the industry during the quarantine period.
According to real estate market experts, the market will fully recover in September. The forecast takes into account the experience and available results of coronavirus quarantine: the quality and timeliness of the measures taken, a small number of cases and the mildness of passing the peak of morbidity. Therefore, the country is ready to receive tourists and buyers. In the worst case scenario, when the opening of borders may be announced in November, prices for Montenegrin real estate will decrease by a maximum of 30%. Thus, we do not expect a global drop in prices and advise you not to postpone the purchase of real estate for a long period of time.
Bulgaria
Evgenia Tsybizova, Director of the company "Key-end-Jay-13"
The current situation with the pandemic and forced work restrictions undoubtedly brought additional difficulties to the work of real estate agencies. But, nevertheless, it cannot be said that the activity is completely paralyzed. Transactions that began before the quarantine are being conducted, and notaries are working. Sellers of resort real estate are often Russian citizens who do not have the opportunity to fly to the deal - they send the documents necessary for the transaction, receive money to an account in a Russian bank. And people are actively interested in buying, especially since Bulgaria is preparing to lift quarantine restrictions.
Due to the fact that the quarantine is a temporary situation and, if it does not last longer than June this year, I do not expect any special changes in prices. There is currently no downward trend in prices. Another thing is that the euro-ruble exchange rate has a greater impact on the resort real estate market. If the euro continues to rise, some sellers will certainly lower the price. But this process began in 2014, so those who really wanted to, sold it a long time ago. Therefore, single apartments are now being sold at a dumping price and, I must say, there are queues for such options and the sale takes no more than a week. But in general, the market is quite stable and, conversely, there is a noticeable increase in prices. If the quarantine lasts longer, for example, until autumn, then the picture may change.
Daria Borzova, managing Director of Oazis Real Estate
We are engaged in resort real estate, this is a kind of secondary human need in this area - to have a comfortable cottage by the sea or a second home for well-off pensioners. Yes, there have been periods of declining housing prices in the history of Bulgaria: 2008-2014 - a decrease in demand for Russian clients for real estate, 2014-2016 - the crisis and the collapse of the ruble, 2016-2017 - bans on officials traveling abroad, etc. But at the same time, the number of real estate put up for sale increased, there was even an oversaturation of the primary market and a price struggle among developers - a square meter of unused housing 3 km from the sea cost a record 250 euros.
But then Bulgaria went through a period of stabilization and consolidation of prices, and by 2018, a slow but steady increase in the cost of facilities began to be observed. In 2020, complexes and houses began to be actively built in the country again, developers began to offer favorable conditions for installments and adequate prices. In addition, domestic demand has also increased, and Bulgarians themselves have begun to actively buy. What can we say about the future of real estate prices near the sea in the current situation? Prices will only rise, no matter what happens to global markets, the basic need for people to live at sea remains.
As can be seen in the comments of experts, based on the current situation in Cyprus, Montenegro and Bulgaria, buyers can purchase housing at a discount of up to 10%, which is most often available from developers. More serious discounts, which many potential buyers are now trying to talk about, have no special prerequisites, except for single objects. Even if we do not take into account today's non-standard period, then, when going to buy real estate, it is necessary to understand that prices are rising even when statistics on the average price show that the objects have fallen in price. This is due to the fact that the first and second lines have already been built up, developers are starting to implement projects at a greater distance from the sea, and it is they who enter the market. Of course, they may cost less than real estate directly on the coast, but this does not mean that objects near the water will become cheaper. On the contrary, due to its uniqueness due to limited choice, the price will only increase, even in the face of a pandemic.
I fully agree with the author of the article and commentators. Very competent article.