Brexit: is the price going to plummet in Cyprus with less UK investment?

The United Kingdom of Great Britain and Northern Ireland exit from the European Union has been considered, by many, as the beginning of the British collapse. Meanwhile, there are others who do not even consider it a revolutionary act. What is true is that there will be those who will take advantage of the situation and who will be able to rearrange themselves. On the other hand, there will be those who, inevitably, will find themselves harmed by the decision made after the 2016 referendum.

It is still too early to know what the behaviour of British investors in the world will be, and particularly in Cyprus. Especially because of the context of a pandemic in which we find ourselves, which has changed the world since December 2019 with the appearance of Covid-19. It is true that this situation (the Brexit) forced Boris Johnson's government to leave its comfort zone. Under this context, British diplomacy has already signed several post-Brexit trade agreements, especially promoting its financial services sector, which represents 30% of GDP.

As International Trade Minister Liz Truss argued, “Now that global Britain has returned, it is time for manufacturers, men and women of action, and innovators, to help us to write our most exciting chapter to date”. At the same time, the decisions made by the world banks have generated "unlimited liquidity", to call it somehow. This proposes a prolific 2021 in company mergers and acquisitions. And everything has an explanation: 2020 started badly, but in May it changed, and the fourth quarter was the best in 13 years.

Between March and December 2020, the balance sheets of the Federal Reserve, the ECB and the Bank of Japan increased more than 50% and went from 15 to 23 trillion dollars. In annual terms, global liquidity increased from $ 81 trillion to $ 95 trillion, according to Bloomberg. With so much money turning over, it will be a matter of time for the market to settle in, while we get used to the new normal. In this context, analysts also expect a rise in prices: inflation will follow suit along with demand.

For now, we will have to wait to know what the real value of the Cyprus property market will be. Meanwhile, in recent months prices have fallen due to two fear factors: Covid-19 and Brexit. This created an excellent opportunity for those who invested, buying excellent properties at a price below their market value.