The real estate landscapes of Greece and Cyprus are undergoing significant transformations, with both nations showcasing promising growth and recovery. However, beneath the surface of these top-line numbers, there are underlying challenges and disparities that need to be addressed.
Greece, in particular, is witnessing a construction boom, with new high-rise buildings emerging in Athens and other major cities. This resurgence is a testament to the nation’s economic recovery, with Greece now being one of Europe’s fastest-growing economies. Credit rating agencies are upgrading their assessments of Greece’s debt, which is attracting significant foreign investments. Major global companies, including Microsoft and Pfizer, are pouring money into the country, signalling strong investor confidence.
Similarly, Cyprus, post the abolition of the citizenship for investment program, has seen a revival in its real estate sector, driven by immigration foreign investments, particularly in luxury properties and tourism-related projects. With most of investment concentrated in Limassol and to a lesser extent in Larnaca and Paphos, there is a notable increase in the number of residential units and office space. A considerable number of technology companies have moved or set up offices in the island, with many viewing it as a stable haven amongst the political turbulence in Israel and the geopolitical uncertainty in Lebanon, Ukraine and Russia.
However, it’s not all rosy. Greece and Cyprus both still grapple with a high debt, and its companies and households are burdened with a significant amount of non-performing loans. The shadow of the financial crisis still looms large, with the pain of austerity measures fresh in the minds of many. The war in Ukraine has also introduced inflation, further straining the economy especially low-income workers.
In Cyprus, while foreign investments have boosted the luxury property market, there are concerns about sustainable growth and the potential for property bubbles, especially if driven primarily by external demand. Furthermore the rapid increase in overseas migrants, both legal and illegal, is causing societal tensions as the state has no mechanism to integrate these new arrivals in the fabric of local society. Thus, pockets of “parallel lives” have been created across Cyprus’ cities, with immigrants concentrated in certain geographies, visiting specific restaurants and venues, etc.
While the macroeconomic indicators and real estate growth metrics paint a positive picture, many locals feel marginalized. The rapid growth and influx of foreign investments have inadvertently led to rising property prices, making it challenging for the average Greek or Cypriot to own a home. This phenomenon isn’t unique to these nations; global cities worldwide have seen locals being priced out due to soaring real estate prices.
In Greece, despite the economic recovery, many still reel from the effects of austerity measures. The rising inflation, especially in essential commodities like food and gas, has made daily life challenging for many. The improving economy doesn’t necessarily translate to better living standards for everyone; nor does it mean that the foundations are being laid for a better and brighter tomorrow for future generations, as the education system and local companies have not adjusted to the rapid changes around them.
While there are undeniable opportunities in these growing markets, it’s essential to approach them with a holistic understanding. Sustainable growth will require balancing foreign investments with local needs and ensuring that the benefits of economic recovery are equitably distributed. As we move forward, it’s imperative to remember that real estate is not just about buildings and land; it’s about people. Ensuring that growth is inclusive and sustainable will be the key to long-term success in these dynamic markets.
As stakeholders in these markets, how can we ensure that growth benefits all?