According to a survey by Cypriot fintech Ask WiRE, the city of Limassol might have an additional 8,000 apartments given the large portions of land that are now unused. The report also questioned if these undeveloped plots should be taxed.
The research was published as a result of the constantly rising demand for city center real estate in recent years, which has raised concerns about how this need would ultimately be supplied.
The business stated that "Ask Wire research has determined that there are many plots of land in the central areas of Cypriot cities that either remain unused, or their rate is only partially exploited."
It said, "As a result of the land retention or building factor, there is a significant rise in both property sale prices and rents for residential units, primarily apartments."
Ask Wire, a company that combines real estate expertise with technology and analytics, crunched the numbers on one of Limassol's most sought-after neighborhoods, known as Papas after a long-established neighborhood supermarket.
The area"mainly refers to the region that extends from the Kean beverage factory, south of Kolonakiou avenue, all the way down to the coastline road in Limassol.
The business determined the area's buildable land, omitting highways and parks, computed the building factor, and deleted any already-existing and future structures.
The corporation also eliminated any commercial zones and usage for greater clarity so that the data only apply to residential zones.
1,515 plots totaling 1,571,729 square meters were located in the Papa area.
There are 3,624 residential units spread throughout 450,249 square meters in these blocks.
According to the business, 1,253,413 square meters—or an additional 803,164 square meters—can be created based on the current urban planning zones.
According to the data, just 36% of the permitted rate is actually being used in this particular location, the company claimed.
The analysis found that an extra 8,000 residential units could be built using an average apartment size of around 100 square meters, excluding terraces and storage spaces.
In other words, an additional 121% of the current number of flats might be added.
With the market in its current situation, taxing vacant properties in high-demand regions is the only way to persuade their owners to either develop them or sell them, according to Ask Wire CEO Pavlos Loizou, even if we tend to demonize all forms of taxation in Cyprus.
"Since the incentives for granting an additional rate already exist, disincentives should also be applied that will push the owners to develop them, in order to stabilise housing prices, as well as make them more affordable," he continued
Loizou explained that if this situation of limited supply continues, prices will rise not only in urban areas but also in the suburbs as demand shifts there. This will have a negative impact on the environment and result in lost time and increased inconvenience due to traffic, necessitating the development of new government facilities and services.
"It goes without saying that the purpose is not to tax people’s primary residence or small owners, but the inexhaustible building factor," Loizou said in his conclusion.
Last but not least, the company said that Nicosia's Acropolis area has similar data that will soon be provided following specific research analysis.
By fLEXI tEAM