Supplying attractive real estate is the key for our country to continue to be a destination for investment, according to Yiannis Misirlis, Founder and Director of Imperio.
Though he stresses that any business moves must always be accompanied by a thorough study of the needs that exist, as well as prudence.
Speaking to InBusinessNews as part of its IN Business Forecasting 2024 series, Misirlis listed a further increase of lending rates as one of the biggest potential threats for the Cyprus economy in the new year, which after successive hikes, will make it even harder for households and businesses to cope, seriously impacting public finances.
Regarding the real estate sector, Misirlis said it cannot but be affected by the difficulties and challenges in the international arena; however, he said by being flexible, adjustable to the new state of affairs and supplying the appropriate real estate tailored to the investors’ needs, the sector will manage to emerge relatively unscathed.
As for Imperio itself, Misirlis said 2024 will see the company enter a very creative phase, as he reveals a new, very promising project is in the works…
How do you see the economic environment shaping up in 2024, in light of inflationary pressures, high interest rates and unpredictable ever-changing geopolitical developments?
The Cypriot economy, even in 2024, will continue to face serious challenges, mainly due to external factors. However, the economic forecasts for the new year are encouraging and give rise to hope for better days.
The IMF foresees a positive growth rate in the range of 2.7%, while the Finance Ministry estimates growth to be at 2.9%.
The forecasts of the EU, Fiscal Council and IMF are just as positive, predicting that inflation will drop further, by around one percentage point, compared with 2023, to reach 2.5%.
The numbers once again show the resilience of the Cyprus economy; however, there’s no room for complacency as right now, besides the war in Ukraine, the war in Israel is also raging, creating an uncertain and unstable economic environment.
What do you consider to be the biggest and most difficult challenges that the Cypriot economy will have to face?
One of the most serious challenges the Cyprus economy may have to face is a possible new increase of lending rates, which combined with the previous hikes, will make the situation for households and businesses even harder, with a serious impact on public finances.
This is why the banking institutions need to adjust their policies for managing their loan portfolios to the new conditions, with the aim of providing customised, sustainable solutions.
At the same time, as I mentioned previously, the geopolitical developments are causing uncertainty and instability, negatively affecting the global market, energy prices and in extent, businesses and households.
The Cyprus economy cannot but be affected by these developments; it needs to rise to the challenges, revising its economic policy when and where needed.
Considering the latest upgrades, would you say the Cyprus economy is now well and truly on a growth trajectory?
The recent upgrades of the Cyprus economy by international rating agencies are without doubt a positive development.
Cyprus’ return to investment grade by Moody’s as well is a development that on the one hand further encourages investments and on the other, can attract foreign, new investors, further boosting growth.
However, the geopolitical developments in the region and the fluid landscape do not leave room for celebrations. To the contrary, we must remain vigilent, closely monitoring the developments and adjusting our policies accordingly.
Only if it is flexible and adjustable to potential new challenges will Cyprus be able to keep its economy on a growth trajectory.
How do you believe the real estate sector will perform in 2024?
The difficulties and challenges in the international arena cannot but affect the real estate sector.
In previous years, the Cypriot real estate sector managed to endure extremely difficult conditions (Covid-19, energy crisis, building material hikes, inflationary pressure, interest rate hikes, impact from war in Ukraine); conditions that continue to exist. Now the war in neighbouring Israel has come to add to the challenges.
But despite this, I believe that by being flexible, adjusting to the new state of affairs and supplying appropriate real estate tailored to the investors’ needs, our sector will manage to emerge from the difficulties unscathed.
The supply of attractive real estate is the key for our country to continue to be a destination for investment. However, any business moves must be accompanied by a thorough study of the needs that exist and prudence.
I am convinced that the real estate sector will continue to be one of the main pillars of growth for the Cyprus economy.
What are you expecting to be the biggest trends/changes in the sector in 2024?
I am strongly of the opinion that the transition to green developments, through the adoption of ESG (Environmental, Social and Governance) criteria will be one of the biggest changes that will happen to the real estate sector.
Climate change and the establishment, at a global level, of targets for a carbon neutral future make environmentally friendly buildings more necessary than ever.
The real estate industry is aiming for more energy-efficient buildings, at the same time that buyers are looking for high-energy-efficient properties, weighing both the short- and medium-term and long-term benefits they offer.
At the same time, we need to adapt immediately and effectively to new practices, such as the use of state-of-the-art technologies and digital transformation.
Given the financial constraints of households and businesses, due to the reasons analysed above, we need to adapt to existing needs, offering properties that are more affordable.
What are the most important problems that are currently plaguing your sector and the solution of which is considered by you to be a priority in view of the new year?
In addition to the various technical issues that need immediate improvement (development licensing system, digital transformation, simplification of procedures, etc.), what I consider to be, in general, a brake on development is the absence of a well-thought-out, optimistic but at the same time realistic plan to enable Cyprus to become an investment destination.
Unfortunately, we are currently having to deal with bureaucracy and outdated systems that hinder the implementation of projects.
It is necessary for the state to intervene effectively on all the obstacles that arise, from the beginning to the end of a project. An example is the existing licensing system, which, fortunately, is currently undergoing changes so that the procedures are flexible, modern and efficient, especially with regard to the time factor.
The government should seize the opportunities that arise for investment, offering the right incentives to the industry to proceed with new, large developments.
If you could ask the government to take specific measures or formulate policies to support/enhance your sector, what would they be?
I have often mentioned that one of the most serious problems plaguing our society is the high cost of renting or purchasing a home. The increase in rent and home purchase prices is being caused by the current conditions of high demand and low supply of real estate in our country, which is being reinforced further by the arrival of many more foreigners trying to escape the war zone.
Now, many potential buyers who are unable to find a suitable property to purchase or who for various reasons are unable to take out a loan, are being forced to rent. However, the availability of properties to rent is also limited. As a result of this situation, rent prices have also shot up.
The only solution to this problem is to increase the supply of properties for which there is huge demand, such as apartments.
The state’s intervention in issues like housing is crucially important and we were very pleased to see recently, on behalf of the Ministry of the Interior, the announcement of measures, which, in fact, are in the right direction as their primary objective is to increase the available properties.
I personally believe it is necessary to build new residences for rent with a specific timeframe, based on a study into the real needs that exist.
In my opinion, a specific number of residences need to be built by 2030 to meet the huge demand by families, young couples, young workers, Cypriots and foreigners.
It is important that these developments are built based on a bioclimatic plan, while they should also provide the ability for purchase through a special state support scheme, like ‘Help to Buy’ which has been successfully implemented in a number of other European countries.
The tax and town-planning incentives that were announced are also in the right direction.
Green financing, so that the new properties are sustainable and adapted to the modern needs, is also imperative.
What is your organisation’s plan/strategy for 2024?
At Imperio, we continue to pioneer, designing and creating projects that meet the modern needs and offer a high quality of life. 2024 will see us enter a very creative phase, as we have a new, very promising project in the works, which however allow me to refer to at a later stage.
At present, we are completing the final phase of Sunset Gardens and 330 apartments will be delivered to their owners very soon. It is the number one housing choice for Millennials in Limassol; a completely sustainable development that offers its occupants all the comforts.
The issues of sustainability, ESG and sustainable investments are criteria that are already prominent in our projects. The design of innovative, modern properties with sustainable features, based on the needs of the buyers, is a priority for us and the big bet that we manage to win to this day.
We touch the lives of people, make dreams come true and create the conditions for a quality life.
What role does the technology factor, such as artificial intelligence, have to play and how is it expected to change your industry?
The technology sector is inextricably linked to real estate as it affects the environment in which we operate – the way we design a project, build, implement, sell/buy, etc.
New technologies significantly help us to assess the needs that exist, so that our portfolios are framed with projects that will be useful and can serve the purpose of their creation.
At the same time, the virtual presentation of various properties, for sale or rent, have reduced distances to zero, making the process of showing the property easier.
In addition, the various smart solutions and modern automation make the everyday life of tenants so much easier, improving their quality of life even further.
Of course, we still have a lot more to see from new technologies in the real estate sector, as well as from the application of artificial intelligence.
Source: cbn.com.cy
