Limassol. The present and the future.

Limassol is currently going through a period of great change. This change is noticed the closer you get to the city from the towers and skyscrapers that are slowly being erected all over town.

The city is now growing steadily and gaining height, and with it, it acquires a new identity. The buyers of these buildings are people seeking to obtain the Cypriot passport through the government;s naturalization program; they are investors who aim, through their investment, to make a good profit, or are people who want to settle permanently on the island with their families due to the many advantages, whether it’s security, the low taxation system, or the sunny weather.

All this change has sky-rocketed the cost of real estate, not only regarding sales but also rentals, making life difficult for locals to purchase or rent property.

Land developers have focused their attention on building real estate which is targeted at the buying public, i.e. those who are seeking the acquisition of passports.

At this time, there is a large shortage in the marketplace of apartments for local buyers/tenants, whether these are for sale or for rent. The situation does not seem to be stabilizing, and it seems like there will be more demand for apartments in the near future, but less housing will be available.

Only once we figure out how many apartments will be needed to accommodate the newly-built casino staff and the staff of the two new five-star hotels operating in Limassol, will then understand how difficult it will be to find real estate and how much rental rates have increased.

The only winners in this situation are land developers, as well as investors who have bought commercial or residential properties in recent years for the purpose of renting them to companies or individuals.

For example, an investor bought a commercial property three years ago and planned to rent it to 30 euros per square meter and have a return on investment of 5 percent on a yearly basis. Imagine that this same property can be rented at 60 euros per square meter. The same scenario applies to residential properties.

Solutions can of course exist to reduce the problem, as long as there is willingness on the part of the officers.

Some solutions I would suggest:

* Increase the building coefficient on large pieces of land that are adjacent to, or near residential areas. This would reduce the cost of land and would cost the total cost of building / housing, so land developers could make a profit even if they sold / rented their real estate more cheaply.

* Increase the rate in certain areas, if it is in blocks, to develop student homes, labor residences, or if 70% of development properties are going to be sold to Cypriot buyers.

* Exploitation of state land. Land that is untapped and is not used for other purposes or is not designated as a forest land or a protection zone could be built up and then leased for 50 years, for example, to young Cypriot couples for a reasonable amount. This land should not be transferable to heirs, other natural persons or companies. The right to build a residence on this land should be granted only to the beneficiary who meets certain criteria.

* Imposition of extra tax on foreign buyers imitating the Canadian model (15% additional tax on the market value of the property). This tax would be lower, around 5%. The amounts of the tax are put into a fund and the purpose of the fund is to support the low-paid Cypriot buyers wishing to build a home. In this way, the money from the tax returns to the property market through the development of residence by the beneficiaries.

I’m certain that we can find a lot more solutions if we really want to see change.

Growth must cover all the layers of society, and not the selected few.

It is up to the authorities to take care of the fruits of development, and to benefit the broad mass of society and to exist beyond growth and prosperity.

I firmly believe that Limassol can become a model city and an example for other European cities.

I think we are on the right track with regards to attracting funds for investment. What is needed is long-term planning and a plan for macroeconomic development.

Investments such as the casino, the mall, the hotels, the marina, the extraction of natural wealth, help towards the country;s economy by making it more stable. We must build this economy on solid foundations with the prospect of future generations to continue this development, and not start building from ashes on ashes after the Turkish invasion in 1974 or after the economic disaster and the haircut of Cypriot banks in 2013.

We live in a beautiful place with plenty of advantages. Let us make it sustainable and attractive for all of us, locals and foreigners.