MISIRLIS - THE QUESTION IS NOT ONLY HOW MUCH WE BUILD, BUT HOW MANY WE HOUSE - Filenews 20/9 by Charalambos Zakos
The real challenge for the Cypriot real estate market is not simply the increase in the number of new homes, but whether the homes created meet the needs and capabilities of the households that need them, emphasizes in an interview with "F" the president of the Real Estate Development Association, Yiannis Misirlis.
Among other things, he comments on the new housing plans announced by the Government, the delays and the cost of development, the proposal to institutionalize the profession of land development entrepreneur, but also on the changes that are coming and will shape the Cypriot real estate market in the coming years.
In recent days, the Government has announced new plans for housing policy. How do you evaluate them? Do you think they can make a substantial contribution to increasing the supply of housing and keeping prices down?
The new plans utilize different tools to create housing options and make use of the existing stock. Their contribution will be seen in the application: how many additional houses will be made available, in which areas, in how long and at what cost for the beneficiaries. The assessment concerns both the availability of housing and the accessibility of housing.
As an Association, we associate the offer with actual access to the roof, both for purchase and long-term rental. The effect on prices depends on whether the additional stock meets demand and does not automatically result from the announcement of a plan. In the discussion we also include the targeted support of households that cannot meet their needs through the market.
Based on your professional experience, what do you think has been the most important intervention to date to deal with the housing problem and what is the main intervention that is still missing?
The interventions have an effect at different stages: licensing in the implementation of a project, urban planning incentives in the possibility of additional construction, housing plans and the KOAG in the choices of the beneficiaries. Their comparison requires data on the dwellings that were actually made available and the households that were served, not only on the applications that were approved.
The gap we point out concerns predictability throughout the path of a project, not just in the timing of a license. We mean clear responsibilities, known timetables and monitoring of pending issues until the completion of the project. Businesses and designers have a similar responsibility for complete dossiers and compliance with the rules. The difference for the citizen lies between a licensed residence and a residence that can be delivered.
The Association has proposed the institutionalization and consolidation of the profession of land development entrepreneur. What will change in practice with such an arrangement? Isn't there a risk that competition will be limited or smaller developers will face great difficulties?
Our proposal concerns the Registry, registration criteria, supervision and the procedure for examining complaints and imposing sanctions. The buyer will be able to check whether he is dealing with a registered professional who meets certain conditions. The Register, however, does not replace the contractual obligations of each company nor is it in itself a financial guarantee for each project.
The risk of restriction of competition relates to the design and application of the criteria. Our proposal provides for objective, transparent and proportionate requirements, as well as the possibility of entry of new professionals, without exclusion due to size. Our responsibility to the buyer remains specific: transparent terms, realistic timetables, quality and timely information, especially when difficulties arise. Trust is built by keeping commitments, not just by our public positions.
What do you consider to be the biggest challenge for the Cypriot real estate market today? Is it the cost of construction, the price of the land, the delays in permitting, the financing or some other factor, but also how can we fill the gap created due to the economic crisis?
The challenge is to match the available stock to real housing needs. The question is not only how much we build, but how many we house. For a household, it counts whether there is a suitable residence where it lives and works, at a cost it can undertake.
The gap of the years of the economic crisis is not immediately filled. Its coverage concerns both new projects and the utilization of suitable existing homes.
Land and construction costs, financing and implementation times do not work independently. A delay can increase financing costs and postpone delivery.
Reducing costs can contribute to more affordable prices, but their formation depends on all market conditions. That is why the offer picture includes the area, the type of dwelling and the possibilities of households, not just a total number of units.
In which direction is the Cypriot real estate market moving today? Are we seeing a transition from smaller residential developments to larger projects and purchases of large parcels of land? Is this a permanent change in the development model?
I would not equate the presence of larger projects with a total abandonment of smaller developments. The two formats cater to different needs, regions, and categories of buyers. Without comparable data on the size and composition of the projects, we cannot speak with certainty of a permanent change in the model.
The change I see is more about the way we design and build: technology, energy efficiency and sustainability. For the buyer, the value of these features is also linked to the cost of use and maintenance, not just the purchase price. Quality and functionality are not an exclusive feature of a large project. They concern every residence, regardless of the size of the development.
If we look at the Cypriot real estate market in five or ten years' time, what do you think will be the biggest change? Will Cyprus continue to build on the existing development model or does it need a different model of urban development as well?
Over a decade horizon, I see more emphasis on how each development fits into the city around it. Housing is connected to transportation, networks, services and public spaces. Urban land consolidation is one of the tools we discuss for the organization of available land, with an examination of the conditions of each region.
At the same time, the existing stock remains part of the discussion. The management of communal buildings, the regular inspection, the maintenance and the treatment of dangerous buildings are different but complementary needs. The image of a city is not only shaped by its new buildings. It is also shaped by whether its inhabitants find housing, move and live safely.
