The government’s incentives to subsidize mortgages seem to be paying off, as there is a great surge in demand from young couples for purchasing apartments or houses. In the absence of foreign investors this is particularly significant.
The incentives cover the purchase or construction of a first residence (including part of the loan for the purchase of a plot). In light of Covid 19, this incentive mobilized young couples who see it as an opportunity to move forward at a time where they can close good deals in real estate.
The incentives cover loans up to €300,000 with a maximum interest rate of 2.3% and give a good opportunity to Cypriot homebuyers who have difficulties in obtaining a loan or felt uncertain about their ability to repay their loan. Overall, the scheme will cover up to 1.5% of the interest rate of their loan for a period of four years.
Regarding expected changes in the property prices, it is too early to make a forecast, as the support measures implemented by the government and the low inventory levels at the right price, still keep the demand from buyers at high levels, showing no reductions in the property prices. Nonetheless, in a free economy such as the Cyprus property market, time will show the effects of Covid 19, as buyers will always push for the lowest possible price, while sellers will still seek to get the highest possible price.