Sotheby’s International Realty, the world’s largest luxury real estate network, has published its Luxury Outlook 2024 report. What global trends have affected the Cypriot market and what needs to be considered in the near future?
The report is based on a survey of 550 Sotheby’s International Realty agents worldwide. This information was supplemented by data from other leading industry experts, including UBS, The Brookings Institution, McKinsey & Company, real estate technology and security firm Kastle Systems, and art and luxury experts from Sotheby’s auction house. The report also explores the trends that shape real estate investment decisions, from generational wealth transfer to choosing countries with more attractive tax systems.
KEY FINDINGS OF THE REPORT
Growing mobility of wealthy buyers
Wealthy people are becoming more mobile and have multiple residences in different countries. Real estate is an important asset, so it is important to be strategic in considering the implications of buying, owning and disposing of real estate, including tax and estate planning, in different jurisdictions.
Cyprus is a popular investment destination. Real estate in Cyprus is often bought by foreigners as an investment, a summer residence or a second home. The cost of housing and price dynamics, new construction, the euro exchange rate, local laws, and regulation of the real estate and investment sectors – all these factors influence investment decisions. An important additional driver is the possibility of obtaining a Cyprus permanent residence permit through the purchase of real estate. The legislation and regulation of the industry is constantly changing. We see a growing demand from clients for broader expertise. To minimize the risks associated with buying real estate in Cyprus, we have a team of experts who help with all additional issues related to real estate for both living and investment.
Focus on sustainable development
Sustainable development is becoming a priority for many. Luxury homebuyers are thinking about whether a home is located in a high-risk area and whether it is built with minimal environmental impact, such as how environmentally friendly the heating system is and whether there is a charging station for electric vehicles in the garage.
Today, buyers are more attentive to environmental and environmental issues than they were a few years ago. We can talk about a growing “climate awareness” that influences the decision to buy a home. The wealthier the client, the more demanding they are of the quality of life. Solar panels, technologies that reduce energy consumption, alternative energy sources, the use of natural materials in the construction of a house, such as marble, wood, stone – these issues are increasingly of interest to clients. The demand for additional home features related to sustainable development is growing. The most popular ones are an electric vehicle charging station, alternative energy sources and a “smart home”. Sustainable development issues are of concern not only to lifestyle property buyers, but also to investors who are starting to assess the risks associated with climate change and take into account non-financial factors.
Digital and technological transformation of the industry
The real estate market uses the synergy of the real and cyber worlds to promote and sell properties. More than 80% of Sotheby’s International Realty’s leading agents said that artificial intelligence is likely to have a greater impact on the real estate sector in the next five years than virtual reality or blockchain.
The digital transformation of the industry continues. The number of online platforms for listing real estate objects is growing. New technologies are emerging that help to better serve customers. In many ways, the technological transformation is associated with the changed lifestyle during the pandemic, when we learned to do many things remotely and live in the digital space. Artificial intelligence, data analysis, blockchain, virtual and augmented reality – all this is gradually becoming our new reality and affects all industries, including real estate.
The report also highlights other trends that will shape the luxury real estate market in 2024, including:
- The rise of wellness-focused homes
- The increasing demand for privacy and security
- The growing importance of location and connectivity
- The continued popularity of investment properties
