What is the current situation in the real estate market of Northern Cyprus in 2023?

The rise in real estate prices in Northern Cyprus

In 2023, experts and investors from around the world are actively discussing the unusual rise in real estate prices in Northern Cyprus. Some specialists have expressed the opinion that it is currently impractical to purchase apartments in this developing area, while others are convinced that we are only at the initial stage of the market and that prices will continue to rise. There are also those who believe that a so-called "bubble" is forming at the moment, which may soon burst.

Expert opinion

To gain a deeper understanding of this situation, we reached out to Mustafa Gürçayfer, the founder and director of Proxy Investment Ltd. He shared his thoughts on the current state of the real estate sector.

Mustafa noticed that there has been something unusual in the field of foreign investments in Northern Cyprus lately. It's interesting to see what the current dynamics are in the real estate market of this region and how scientifically justified the rumors about a "burst bubble" are.

Changes in the real estate market

According to him, the real estate market in Northern Cyprus is undergoing significant transformative changes. In particular, the number of available listings has increased in recent months, allowing potential buyers to find options that suit them. Despite this, the sales level remains quite high, comparable to what was observed at the beginning of 2023.

Analyzing the statistics of some leading developers, it can be observed that most of the apartments put up for sale have already found new owners. One of the largest developers in the region set a record for sales volume this autumn with its new project, which includes 2,300 apartments – this offer has become the largest in Northern Cyprus. Moreover, sales are not only maintaining a high level but are also continuing to increase.

Competition in the market

• Small construction companies find it difficult to compete with larger players in the market.
• The tough competitive environment doesn't always allow small companies to offer attractive conditions for customers.
• Projects with 50 apartments from lesser-known developers face significant challenges during implementation.

Speaking about the rumors of a "bubble," Mustafa points out that this is a myth that arose as a result of competition with investments from other countries directed towards Northern Cyprus.

The situation in the rental market

On the other hand, he also brought to light the instability of the current rental market situation. Recently, a large number of ready-to-rent apartments have hit the market, with owners willing to lease their properties. This has led to increased competition; not all apartments are finding tenants, and the expected returns are...15%The annual figure turns out to be unattainable. In practice, however, it often amounts to about10%.

Conclusion

In conclusion, real estate in Northern Cyprus continues to evolve, and investors are strongly advised to be prepared for changes and new challenges arising in this dynamic market.

Changes in the real estate market of Northern Cyprus

In recent months, there have been significant changes in the real estate market of Northern Cyprus, and potential investors should pay special attention to the current situation. One construction company has successfully implemented a rental and management model, resulting in the sale of 4,000 apartments. Now, its plans include entering the market with another 3,000 new properties. The question facing investors is: will they be able to easily attract tenants for such a substantial number of housing units?

Despite the fact that the number of clients looking to rent property on the island continues to grow, they are increasingly showing interest in more premium and luxurious housing. This situation highlights the need for a new approach to selecting investment properties.

Return on investment (ROI)

Consequently, the task of maintaining a return on investment (ROI) is becoming increasingly challenging. Previously, investors could expect stable annual returns of 12-15% when investing in Northern Cyprusreal estate, but in recent years, there has been a trend of this figure decreasing to 8-10%. Nevertheless, there are management companies that work with clients and provide more comprehensive services, allowing them to achieve and even exceed the minimum required profitability.

Competition in the real estate market

It is worth noting that the presence of healthy competition in the real estate sector positively affects the quality of service and the wide range of services available in Northern Cyprus. This is undoubtedly a favorable factor that contributes to the further development of this sector. How have housing prices in the region been lately? What is the minimum level of investment expected from new potential market participants?

Rise in real estate prices

With the beginning of 2023, we have witnessed a significant increase in real estate prices. This has positively affected those who previously invested in local projects; however, construction companies continue to exercise caution to avoid losses of their capital. How does this manifest? When a new project is announced, the prices at the construction stage are set just a few percent higher than those previously offered.

Price trends and profitability

It is important to note that realtors and developers closely monitor price fluctuations in the market to maintain a profitability level of 10-12% on their investments and ensure a capital gain of 40% to 50% during the construction process. A key element of this approach is the proper management of the supply and demand ratio.

Opportunities for earning

Currently, there are many options for earning money through the sale and rental of apartments in Northern Cyprus.

Advantages of the current policy in the real estate market

I believe that such a policy is justified. If real estate prices continue to rise sharply, Northern Cyprus will lose its appeal compared to other regions. In the future, tourists and buyers may lose interest in this place, as housing costs will become comparable to prices in Paris.

Market participants clearly understand their competitive advantages and therefore work on maintaining the attractiveness of our region for clients. This is precisely why all companies closely monitor reasonable price changes, starting from the pre-sale stage and continuing until the completion of construction.

For example, a new construction company has raised its initial prices for10-15%Compared to the previous project, this one offers good prospects for potential investors in terms of profit from subsequent resale.

The current situation with housing prices

As for the current situation with prices, on the Northern Cyprus market, you can buy a studio now for about£95,000The maximum prices for such properties reach the mark of£180,000.

Recently, a studio was sold for£187,000but this was an exception — the property was located within a hotel complex with full management. Investors should remember what exactly£187,000They are acquiring a studio — it's an apartment located just in30 metersfrom the sea, in an area with high land prices and a full range of services. On average, the price of a studio in Northern Cyprus is about£120,000.

Changes in customer profiles

As for the change in the profile of buyers, it has certainly undergone changes. Significant transformations relate to the geographical structure of the countries from which investors come. Currently, the following trends can be identified:

• A decrease in interest from clients in Eastern Europe.
• Increasing the flow of customers from European Union countries such as Poland, Germany, and Lithuania.
• A recent acquisition by an investor from Lithuania.90 apartmentsin the new construction project.
• A significant share of the market belongs to buyers from Sweden and Norway.
• Decreasing interest from the residents of Italy and France.

This trend can be explained by the fact that real estate prices in Northern Cyprus continue to be attractive to the European middle class.

Investments of high-income entrepreneurs

Moreover, an interesting trend has emerged among high-income businessmen from Russia and Ukraine, whose income fluctuates within5,000,000-10,000,000 dollarsThese investors often engage in entire projects or the purchase of whole houses.

They prefer to acquire shares in projects during the construction phase, so they can then sell their properties upon completion. There is also a group of investors who tend to choose not finished properties, but rather larger plots of land, understanding the direction of the local market's development and its potential for the future.

Stabilization of the real estate market in Northern Cyprus

The real estate market in Northern Cyprus is rapidly changing, moving towards a more structured and stable state. In 2023, we witnessed several significant events that impacted this sector.

Growth of the construction sector

The construction industry is experiencing incredible growth: the number of companies is increasing, creating a competitive environment and, as a result, improving the quality of residential properties. In recent years, residential complexes have emerged on the market that can compete with the best global projects in terms of their characteristics and appearance.

Property management services

In addition to this, the supply of comprehensive property management is increasing in Northern Cyprus, improving infrastructure and creating favorable conditions for investors. There is a growing interest from international players who are beginning to realize the high returns on investments in the construction sector of Cyprus.

Market imbalance

However, this optimistic picture has led to an imbalance in the market, where the volume of offers has started to exceed demand. Despite this situation, buyer interest in real estate remains at a level comparable to the beginning of the year, with a slight increase.

Issues and legal regulation

The main focus is on the emergence of new players in the construction sector, who do not always adhere to unified standards. As a result, there have been issues with legal regulation, which requires intervention from government bodies.

In 2023, the government plans to implement new laws aimed at normalizing the construction sector and protecting consumer rights. In particular,Recently, a decision was made to prohibit foreign citizens from opening construction companies and becoming developers on the island.Now 100% of the shares must belong to Cypriots.

Changes in business regulations

The previously existing system, where foreign investments could be made through a local partner with a 51% stake, sometimes led to problems when investors, facing difficulties, could simply close their companies, leaving local shareholders without a way to recover their funds.

Positive trends

The new reality is radically changing the situation in the market, which is perceived as a positive signal. Now, developers will be more focused on maintaining their reputation and stability while being on the island on a permanent basis.

Real estate agents

The changes also affect the real estate sector, where almost anyone can start their own agency. All you need for this is a social media account and a phone for communication.

Adaptation to new conditions

Thus, the real estate market in Northern Cyprus is gradually adapting to new regulatory conditions and consumer needs. This will lead to an improvement in the quality of properties and an increase in the level of service for clients.

Prospects for development

The implementation of new rules and standards will serve as the foundation for more responsible and reliable interactions among all market participants, thereby contributing to the further development and strengthening of the real estate sector in Northern Cyprus.

Conclusion

In conclusion of my article about the real estate market situation in Northern Cyprus in 2023, I want to emphasize that while the continued rise in prices and potential instability in the rental segment raise certain concerns, the current status of the market creates interesting opportunities for investors. The opinions of experts, including Mustafa Gursafa, confirm that there is currently healthy competition between large and small construction companies, which in turn leads to improved service quality and increased pressure on prices.

At the same time, the growing supply in the real estate market offers buyers unique investment opportunities. The trend of gradually lowering return expectations from 12-15% to 8-10% is a natural response to market saturation, but this does not mean that earning opportunities are exhausted. On the contrary, a smart choice of real estate and working with reliable management companies can lead to respectable results.

Key points

• Healthy competitionbetween large and small construction companies.
• Improving service qualityin the real estate market.
• The growing offer createsunique optionsfor investing.
• Reduction of return expectationsfrom 12-15% to 8-10%.
• A competent choice of the object and work withreliable companies.

It should also be noted that a proper risk management strategy is key for investors, as the market remains influenced by numerous factors—economic, political, and social. Personal experience and market analysis will help identify "gems" that can yield significant returns in the future. At this stage of development, it may be worth focusing not only on ROI standards but also on long-term trends, such as infrastructure development and the increase in tourist flow to Northern Cyprus.

Market prospects

In the end, I believe that despite the current challenges, the real estate market in Northern Cyprus will continue to attract the attention of foreign investors. Constantly monitoring the situation and adapting to changing conditions is what will help each of us not only seize the moment but also successfully profit from real estate in this picturesque region.

I sincerely hope that every investor finds their path to success, and that the market continues to develop, becoming increasingly attractive for both new and experienced players.