Paphos property market contracts — new houses more compelling than used ones?

The Paphos real estate market experienced a slight decline of 17 per cent in the value of property transactions during the second quarter of 2023, according to George Mais, the president of the Paphos Chamber of Commerce and Industry.

In an interview with the Cyprus News Agency (CNA), Mais stated that the Paphos district witnessed a decrease in the property market during the second quarter.

While sales amounted to €297 million in the first quarter of 2023, the second quarter recorded a decline, with sales reaching €252 million.

Moreover, he mentioned that there were 1,103 transactions in the first quarter of the current year, while the second quarter of 2023 saw 1,022 transactions.

The chamber president described the decline as minor, attributing it to circumstantial factors, and emphasising that the number of sales or the volume of transactions are not enough to make serious assumptions.

In addition, Mais stated that the decrease in transaction value was approximately 17 per cent during the second quarter of the current year. In terms of the number of transactions, there was a decrease of approximately 7.5 per cent.

Regarding the property categories sold, Mais noted an increase in residential properties and a decrease in apartments.

However, he clarified that these trends should not be considered significant indicators in the broader context of the property market.

He also emphasised the need for a comprehensive analysis of the data, examining the trends and reasons behind the variation, whether in terms of percentages or actual transaction numbers, in order to draw more accurate conclusions.

The case for new hew homes

Meanwhile, a separate piece of analysis by the managing director of Paphos-based real estate company Property Canvas, Christos Nikolaou, suggests that investing in new homes may be more advantageous than resale homes in the current Paphos market.

In his analysis, Nikolaou highlighted the benefits of new properties and provided relevant data to help investors make informed decisions.

Nikolaou pointed out that while a 15-year-old two-bedroom apartment costs just under €200,000, a brand-new apartment is priced at approximately €250,000. Despite the higher cost, he argued that investing the extra €50,000 is worthwhile due to a number of reasons.

These include modern features and amenities, customisation options, lower maintenance costs, as well as a warranty and other guarantees.

Nikolaou explained that bew properties offer the latest in design and technology, including energy-efficient appliances and smart home systems. Moreover, new storage options and built-in cabinets maximise space utilisation, while features like large windows, thermal insulation, indoor gardens, and green walls contribute to a more pleasant and environmentally friendly living environment.

In terms of customisation, he noted that buyers can choose layouts, materials, and finishes that suit their lifestyles.

“According to a 2015 research by the Royal Institute of Chartered Surveyors (RICS), homebuyers are increasingly favouring customised homes that suit their preferences,” Nikolaou stated.

Regarding costs, Nikolaou pointed out that newer properties generally require less upkeep and immediate repairs compared to older homes.

“In the first years, maintenance costs for newly constructed homes typically amount to roughly 1 per cent of the purchase price, but they might range from 2 per cent to 4 per cent for resale homes,” he stated.

“Additionally, an Energy Efficiency Class A home, which is the norm for new constructions, can save about €80 per month on energy costs depending on an average home size of 150 square metres with an EPC Class C,” he added.

Rewarding warranties, the real estate executive noted that builders or developers of new homes provide warranties and guarantees that cover building flaws, significant structural problems, and specific systems and equipment.

The warranty periods in Cyprus typically range up to 10 years for the building, 2 years for plumbing and electrical systems, and 1 year for appliances.

Nikolaou acknowledged that resale homes are often located in well-established areas close to amenities but may require revitalisation due to their outdated appearance.

While they may cost less initially, it’s important to consider renovation costs and overall return on investment. Moreover, newer properties tend to command higher monthly rental fees. Additionally, there may be room for negotiation when purchasing a resale property, as owners may be more accommodating than developers of new properties.

Considering budget and finances, Nikolaou advises carefully assessing the affordability of new homes, which offer modern features, customisation options, and warranty coverage, while also factoring in potential renovation projects and expenses associated with resale homes.

“Remember to evaluate potential revival projects and repair expenditures with
resale homes,” Nikolaou said.

“If affordable, new properties align with current trends for individualised living spaces, improving your quality of life and potential long-term profits through renting,” he added.

If feasible, he continued, investing an additional €50,000 in a new property over 15 years, equivalent to €3,500 per year or €280 per month, can be a wise financial decision.

“By evaluating your specific needs, preferences, and financial considerations, you can make an informed choice for a fulfilling homeownership experience within your budget,” Nikolaou concluded.