Property Investment in Cyprus and The Effect of Climate Change

Readers mail.....

From A A Wisley.....

The Cyprus Property Market

Cyprus has long been a favoured place for holidays and retirement because of its year round sunny weather. Fuelled by tourism, retirees and the massive flood of black money from drug dealers, oligarchs and sanctions busters, property prices have soared to eye watering levels.

Is Cyprus, especially the southern part, still a good place to invest?  Will prices rise or fall?

As with all markets, predicting long term values means assessing the fundamentals; demand, supply and financial liquidity. For the long term (5-10 years) demand will be the most important factor and this will be materially impacted by climate change which could cause the market to crash.

Cyprus In Worst Affected Area

Predictions from the IPCC and other studies indicate that the eastern Mediterranean region, Cyprus included, can, over the next few decades, expect an increase in annual average temperatures of up to 5.5°C over pre-industrial levels (although 3-4C is more probable). This is in comparison to the Paris Agreement target to limit global temperature increase to 1.5°C. The effect on Cyprus, which is already environmentally stressed, could be disastrous.

A study by the Cyprus Institute concluded that the impact of climate change would be extreme for Cyprus in nearly all categories including:

• direct losses from weather disorders

• coastal flooding and erosion

• the supply of drinking water

• crop yields

• deforestation

• biodiversity loss

• insufficient energy for heating and cooling

• lack of water for cooling thermal electrical plants

• tourism and recreation

• and health

The takeaway points here, for the property market, are that the demand for retirement homes will disappear, probably completely, because the heat and pollution hazards will become too dangerous for people of retirement age. Even the more agreeable winter temperatures will bring no respite because of the influx of insect borne tropical diseases such as Nile, Yellow and Dengue fevers and water borne diseases such as salmonella and dysentery.

The tourism industry will be similarly damaged because of the excessive heat, loss of beaches and the other environmental assets plus the risk of war. Even the most fervent sun worshipper will question whether Cyprus is a safe destination for a summer holiday. In addition, the lack of an adequate supply of water and power for air-conditioning will be a huge deterrent.

Existing investment in property is also of questionable value given the out of date building standards and the likely, future, inadequate power supply for summer cooling. Properties could become unsaleable in just a few years from now.

Whilst the north of the Island is affected by the same climatic grip its buildings are more modern and climate proof because its touristic developments have only recently begun. Water is not a problem with a water pipe line from Turkey and its current electricity eccentricities are rapidly being addressed with another electric pipeline planned to come from Turkey..

Conclusion

A long term investment in Cypriot property, especially in the overblown retirement and leisure arenas of the south of the island needs very careful thought. What was once an asset, the weather, is now becoming a liability. If you are already a Cyprus property investor, consider whether it is time to reallocate your property portfolio elsewhere.

To read more reviews and Readers Mail click here
https://cyprusscene.com/2024/08/31/property-investment-in-cyprus-and-the-effect-of-climate-change/