Property prices in Larnaca have recently surged to levels akin to Nicosia, largely due to heightened interest from Israeli investors, according to local real estate sector stakeholders.
The Israeli enthusiasm for the region continues despite a slowdown in property sales following the eruption of the conflict with Palestine, pivoting towards rental properties, causing residential rental prices in select areas to skyrocket, rendering them unaffordable for local residents.
According to Vassos Zakos, director of FOX Real Estate in Larnaca, “The interest prior to the war was akin to a strong rain for Larnaca. Although post-war, the number of Israeli inquiries declined, their aspiration remains high. They express intentions to abandon Israel and seek properties in Cyprus, especially in Larnaca.”
Larnaca’s appeal to Israelis stems from its proximity to the airport, growth prospects, and a sizeable Jewish community presence, making it the prime real estate market. “The once lower-priced Larnaca now mirrors Nicosia’s rates, presenting challenges for local Cypriot couples,” added Zakos.
“Prices for new two-bedroom apartments of 80-85 square meters start from €200,000 and rise depending on the area, reaching over €300,000 in areas like Mackenzie. Larnaca, previously much lower than other cities, has reached Nicosia’s levels, posing challenges for new Cypriot couples. We hope the measures announced by the government for affordable housing and rent will assist the local market,” Zakos noted.
The surge in demand has significantly driven up rental prices, worrying experts about the possibility of further price escalation, Themis Anastasiou from Africanos Properties remarked. “Demand from Israelis for short-term rentals has amplified post-war, compelling continuous price hikes,” he added.
Marinos Kineyirou, president of the Cyprus Real Estate Agents Association, cautioned that Larnaca might surpass Nicosia in prices. “The current stagnation in sales, coupled with significant property price hikes, poses a threat of Larnaca surpassing even Nicosia’s rates.”
“After the war, demand for rentals from Israelis increased. They seek accommodation for three to six months, leading to continuous price hikes,” Anastasiou added.
Companies express interest to relocate headquarters to Cyprus
The war has led some Israeli companies exploring the option of relocating their headquarters to Cyprus, particularly in Larnaca. However, significant infrastructure for large offices is currently lacking in Larnaca, Vassos Zakos noted. “At this stage, they are conducting exploratory moves because they want to continue their operations. They prefer Larnaca due to the airport and the relationships they have with the city. However, there is currently a lack of infrastructure for large companies in Larnaca, nor are there sufficient apartments for their employees to reside in,” he said.
“The issue of the lack of large offices in Larnaca has long been raised by the Larnaca Chamber of Commerce and Industry (LCCI). Companies wanting to settle in Larnaca currently lack offices. To offer a complete package, there must be accommodation and private schools for the families relocating to Larnaca,” highlighted Charalambos Andreou, LCCI’s Director.
Furthermore, the Israeli interest extends beyond real estate to substantial investments in hospitality and business ventures. “Major investments, such as the redevelopment of the port and marina, stem from Israeli funds,” stressed Andreou.
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