Each year I visit Larnaca I notice more businesses have closed. Some parts of the city even look abandoned. Do you think the €1.2 billion Marina Project will reboot the Larnaca economy?

14 comments

  1. Always seemed the same to me. It’s more of an issue of how we operate. We want good shit. We want name brand shit. We don’t wanna pay for shit. Pharmacy, periptero, coffee place. Open one of these if you wanna make it more than a year.

  2. It depends on whether the Marina project will attract foreign investors/rich people that will want to live in the city, in a similar way to Limassol.

  3. Don’t believe in the big investment numbers !! Surely it can help but the problem in Cyrus of property development etc. by non professionals is the justice system that is so bad that it takes many years and huge costs to get your rights! So if you invest in property for passive income this may end up to be a nightmare as tenants may not pay you and be difficult to take them out, damage your property etc. So unless you have big capital and ability to really control your property investment don’t take the chance !!! Of course high risk ( liquidity , legal etc. ) can give high profit or high loss!! Also note that property prices in Cyprus are already very high discounting benefit from marina etc. And with rising interest rates the upside if any is limited.

  4. It’s because there is no incentive for a lot of property owners to fix or actually rent out their property.

    A lot of them are old, so likely paid off or inherited, and the owners think that they can charge the same rent as when they were brand new even though they spent 0eu ever maintaining them. And if they put it for sale, their price point will be as if it’s a new prime development rather than something that will need to be demolished.

    Also zoning in Cyprus is dumb af. Like 90% of all buildings have shops underneath, irrespective if they’re actually in a remotely good location for retail. So when some idiot rents it, they wonder why only 3 people, 17 cats and a goat pass by each day. Councils and planning department should focus a lot more on concentrating retail and office spaces in the same areas to increase foot traffic and make commercial centers more viable.

    Basically like all the problems in Cyprus it’s self created and nobody wants to do anything about it because it’s easier to just hand out planning licenses for bullshit developments for rich people. Because fuck the local population.

  6. I’ll refer to a possible explanation for buildings like the one on the top-right:

    A while back I was discussing the matter of inheritance tax, and its absence from our tax system. A (VERY) quick brief on how it works in the UK:
    – You inherit something (cash, assets etc), some are exempt by nature
    – You have a big allowable deduction (325k currently in UK)
    – the remaining gets some inheritance tax which you have to pay

    Now I am not saying this is a necessity and we should introduce Inheritance Tax in Cyprus, but why is this relevant? Some of the older looking buildings are the result of the lack of this kind of tax. Children or distant relatives inherit old buildings from people passing away, and they leave them unutilized. Either because they are not in the country, or because the building are not worth renovating at all. Some might even rent them for filthy cheap to whoever is willing to live in there, usually ending with dozens of people occupying them. “‘Αηστα τζιαμέ, εν βαστώ να το σάσω”, “ασσέν τζιαι 100 ευρώ τον μήνα” have been some of the responses I got from a couple of mates that happened to inherit such buildings.

    How would an inheritance tax help? Imagine inheriting a building like that, and you can’t be bothered to fix/utilize it for one reason or another. But that building is in a good location, or of a big size, and it comes with a Inheritance Tax Charge of say 20K. Out of the blue, you will need to pay 20K for something that you probably want be using. This will push you towards three paths:

    1. pay the tax and “άηστο τζιαμέ”
    2. pay the tax and utilize it in one way or another – renovate it and either use it or rent it
    3. pay the tax and sell it.

    Chances are, 1. won’t be the case. And the other two drive progress. A development of some sort will happen. The buyer will want to make the most of it, renovating it yourself to utilize it in any way will change how it looks. And that’s how progress could be “enforced”.

    Sorry for long reply and this might get some hate (ate re koumpare, edouleukamen jai ta kopellouthkia mas na pkierwnoun gia tin klironomia tous?), just some food for thought that might be relevant.

  9. I have lived for about a month in Larnaca about a decade ago but I never seen those buildings. There aren’t close to Foinikoudes or Fanieros Villa right?

  10. Well, it’s a long story. Larnaca now actually has more money circulating than it’s had since the pre-crisis good years of the 2000s. Real estate / property in Cyprus follows its own idiosyncratic rules and its development is closely tied to political events.

    The basis for prosperity has always been a huge economic inequality. There are the rich Arabs, Russians etc. and some of that trickles down to the rest. Land will never lose its value.

    Regarding the marina, yes, it will bring more money, but, again, it will be distributed in a very uneven manner. The recently completed Ayia Napa Marina is a success.

  12. It will definitely help reboot the economy. Imagine how many jobs will open for such a project.

    But the reason why so many businesses are closing down is a different story. It’s actually a never ending cycle which in Cyprus is very common. Who to blaim for …

    In my opinion there are multiple reasons why businesses are closing down in Cyprus

    1. Rediculous high rent
    2. No incentives from the government
    3. Really high cost for renovation.
    4. No footfall
    5. People aren’t shopping the same way they used to do 10-20 years ago.

  14. covid killed alot of it, and when they started to rebuild themselves the mall only encouraged it. the marina will boast local business but will likely just be the ones on the forefront and just day tourists. there will probably be loads of cruises coming in; they wont boost the nightlife much and may result in larnaca becoming more of a tourist summer place not so much liveable and year round place.

    another thing is the cyprus buy-for-citzenship will ensure that the properties dont become affordable anytime soon. imo we need more permanent employment around larnaca center, caps on property prices and extra taxation on the homes people are using for citizenship purposes and tourist places that wont be used for most of the year. i think if we get rid of the mall that would benefit aswell to support small local businesses.

    **im not an economist or specialist in this so this may not be 100% correct or up to date :)**

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