Acquisition of land/building plots as an investment, either for future capital appreciation/development in the future, was up to the recent years more of a national sport. Due to the booming period over the years up to end 2008 for the real estate market with prices increasing at a very fast rate and with positive sale prospects, investing in land made a lot of sense.
Since the commencement of the recession however (end 2008) demand for this nature of property was reduced considerably, causing a freeze and even reduction in values, especially for agricultural and land with no immediate development prospects. The market has started to improve after the year 2016/2017, be it that values are still below the pre-recession levels.
Nowadays demand directs itself towards building plots for residential development for locals and it refers to the town periphery mainly forthcoming for private housing development. Central towns plots having a building density in excess of 100%-120% are also now in demand mainly forthcoming from developers, who are now in competition to provide residential apartments directed towards locals, rather than those for the foreign market (restricted in the seaside towns and for chosen locations).
Commercial plots have now a somewhat unpredictable market due to the over supply of shops and with no widespread demand for offices. Land in the tourist areas have a keen market following the improvement of the tourist industry and the good demand that there is for (chosen localities) for holiday homes. Land along and near the beach and those which are near the marinas, have also interest, but suitable plots are quite pricy limiting their ready market. At this point of time values for such properties are kept at constant level and landowners are not keen to dispose their holdings and as such supply comes mainly from foreclosure deals by the financiers and from investment Cos.
Industrial land is not in good demand save those plots near the harbors and locations such as Nicosia and Limassol have a higher interest than others (considering also that in industrial areas offer also ready buildings for occupation).
The recent announcement of the Minister of Interior that the prevailing building densities adopted are low and suggested that they should be increased by at least 20%, has added to the speculation for such properties and at this point of time, it is a wait and see what the new provisions of the planning zones will be (expected to be introduced within the next couple of years).
The residential market seems to be the leader in the recovery and demand especially for those plots which are close to existing colleges and universities and notwithstanding the increase number in the supply, the students number increases at a faster rate. So at this point of time they have the most clear positive future (whereas the lack of small studio – 1-bedroom units, show an increase in rental levels by 30% over the last couple of years).
L and which are destined/suitable for the tower blocks, whose demand is mainly directed towards the visa/passport investment scheme, seems now that they might be in trouble, due to the recent events restricting this scheme as well as the pending/expected new limitations on the interested buyers and we even read suggestions that this investment scheme should be abolished. As such their future depends on what sort of restrictions will be introduced (in addition to the expected resale of the already acquired units, which will be coming into the market over the next couple of years).
The one that took the biggest hit due to the recession is the agricultural land, which has no potential nowadays for development (even for one house as it was allowed before) and such property is at a level less than 50% of the year 2008 values, with no signs of a short term improvement.
The reduction of the deposit interest rates, the uncertain future of some of the local banks and the still recent (2013) Bail in, which are in memory of the locals, are some of the factors that there is a general improving interest for real estate since it is considered as being more safe than cash deposits and other type of investment (e.g. shares).