The Cyprus property market has seen an increase in values lately according to the Royal Institute of Chartered Surveyors (RICS).
“Commercial real estate in Cyprus has seen a slight increase in capital values and rental values, showing some signs of stability,” said RICS Cyprus board member Jennifer Petridou Sharpe in a press release.
“The effects of NPLs [non-performing loans] and the foreclosures law are yet to be determined,” she added.
Sharpe said that banks continue to be “very strict” about lending money, which is restricting investment.
“Interest for commercial real estate investment is primarily from institutional investors and from (non-European) wealthy individuals for Cyprus passports, through investment,” she said, referring to the scheme that provides for either Cyprus citizenship or permaneny residency on the basis of significant investment in Cyprus.
“Investment interest is expected to improve in 2016 given the two government tax incentives for reduced transfer fees (50%) and the exemption from any future capital gains tax for any property bought by 31 December 2016,” she said.
Commercial surge in Europe
Meanwhile, the latest RICS Global Commercial Property Monitor shows “exceptional investment market conditions” in Germany and Spain, where investors’ expects strong returns in both prime and secondary assets over the next 12 months, RICS said in a press release.
“Investment activity is improving markedly in several cities within the euro area, particularly in Madrid, Amsterdam and Berlin, where demand from domestic and foreign buyers is on the rise, whilst supply of commercial property is stable, producing upbeat outlook for sector performance over 2016.”
The optimism and positive trends across the eurozone are in contrast to the “challenging situation” in most emerging markets, RICS noted, where investors’ confidence remained negative during the fourth quarter of 2015, with the exception of India.
Sentiment with regards to both the investment and occupier markets in China, Brazil, Russia and South Africa continue to be negative.
“Looking at the future, respondents to the survey are particularly confident of seeing robust capital value growth in Ireland, the UK, New Zealand and Japan during 2016, as strong job creation in these economies is driving occupier demand and this could lead to firm rental growth in the coming months,” RICS said.
Apart from the excellent readings in Germany and Spain, commercial real estate sentiment also continues to pick up in other parts of Europe, in line with their economic trends, RICS said.
This is the case, for example in Ireland, Hungary, Portugal, the Czech Republic, Bulgaria, Romania and The Netherlands, where respondents to the latest RICS monitor are confident in the prospects for both rents and capital values over the year ahead.