Cypriots priced out as Russians, Israelis eye coastal city

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In the southern Cypriot coastal city of Limassol, prices have risen and local residents have been raised by Russian and Ukrainian businesses fleeing war conditions, and Israeli investors betting on real estate.

One of them is Eleni Constantinidou, pregnant when her landlord terminated her lease. Unable to find an affordable place in her hometown, Cyprus had to move in with her parents, husband and baby.

In 2016, it cost her 400 euros ($438) to rent a beachside apartment in Cyprus’ second city, home to about 176,000 people.

Now, rent is “at least 1,500 euros for a two-bedroom apartment”, she told AFP.

“There is nothing accessible to Cypriots anymore. These owners know, and they are only looking for foreigners,” said Constantinidou, who is in his 30s.

By comparison, in the capital Nicosia — inland and without a view of the Mediterranean — a ground floor two-bedroom semi-detached unit can still be rented for around €650 a month.

But Limassol — often called “Moscow on the Med” — has long been a magnet for Russian speakers.

In February 2022, as Moscow began its invasion of Ukraine, fintech companies began pulling out of the two warring countries and neighboring Belarus.

Many in Limassol decided to take advantage of the favorable tax environment in Cyprus, and with the lucrative industry came a new class of money professionals.

In May, Russian communications company Vestnik Kipra’s site added 3,000 new IT specialists to its roster, a number that has only grown since then.

As for the Ukrainians, the mayor of Limassol, Nicos Nicolaides, estimated that over 10,000 moved to Limassol since the war, “which is a large number”.

Dmitri Leonov, who works for a fintech company and relocated to Cyprus from Moscow before the invasion, said the average salary in the sector is 5,000 euros.

“So for them, paying 1,500 euros for rent is not a problem,” he told AFP. “It had a pretty profound impact on the real estate market.”

He himself paid 1,500 euros for his apartment. Then the landlord said the rent was rising to 2,000 euros.

The young father said he was “lucky” to find another flat within his budget, considering “more than 60 people” had applied for it.

– ‘Way too much!’ –

Rent in Limassol has risen by 23 percent in one year, according to Ask WiRe, a Cypriot real estate market analysis startup.

By comparison, he says rent in Nicosia went up by 14 percent.

According to Marios Constantinou, head of the property agency QuickLets, that increase attracted “investors from Israel, who consider Cyprus a very good investment opportunity”.

The influx has also led to an increase in selling prices.

“We saw many apartments being built to sell for around half a million to 700,000 euros,” Pavlos Loizou, founder of Ask WiRe, told AFP.

He points on a map to an apartment in the center of Limassol: 475,000 euros for 100 square meters (about 1,000 square feet).

“That’s too much!” Loizou said.

Behind such big money projects often foreign investors, “especially Israelis”, he said.

However, this “triangle” of “foreigners selling (land) to foreigners, developing and selling or renting it to foreigners” is nothing new, according to Loizou.

Since 2008, developers have barreled through the island, transforming Limassol’s skyline into tower blocks and luxury homes, making it the most modern of Cyprus’ cities.

The island’s booming banks made huge loans to developers without hesitation, a trend that helped bring the country to a standstill in 2013 after a crisis in neighboring Greece.

“The economic system is now stronger, but it is still dangerous when foreigners take your country for a financial playground,” said Constantinou.

According to real estate expert Antonis Loizou, 4,123 properties in Cyprus were sold to foreigners in 2022, an increase from 2,432 in 2020.

– Social housing –

Before it was abolished in 2020, Cyprus’ “golden passport” scheme granted citizenship to thousands of foreign investors – many of them from Russia – in exchange for a 2.5 million euro investment, often residential property.

The scheme has been discontinued for many years, but not before it had brought controversy to the country’s political leaders and left an indelible mark on the Limassol housing market.

The $5 million listing of one such residence is set to earn a huge commission for Florent Gastine, a French real estate agent who traded his life on the French Riviera for the “booming” market of Limassol.

With a sea view, a marble kitchen and a huge swimming pool, the same Russian-speaking owner is offering another apartment for rent for 18,000 euros per month.

“This is the market price,” Gastine told AFP, explaining that the end of the golden passport scheme created a domino effect. Developers built less luxury units, which “push prices up”.

The only solution, according to the mayor of Limassol Nicolaides, is to build social housing.

“We don’t want Limassol to be a city where only white-collar workers can survive,” he told AFP.

“For Cypriots, it is heartbreaking to think that they cannot live in the place where they were born.”

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