Cyprus Real Estate Market – Primed to Take Off
2017 Key Market Highlights
The real estate market, and in particular the residential property sector, is directly affected by the overall economic performance of the country. The positive developments in the economy as indicated through the improvement of economic performance indicators, such as the growth in real GDP of 3.4% in 2017, various upgrades of Cyprus’ credit ratings as well as increase in tourist arrivals 16.6% growth in 2017 Vs 2016 positively affected the Real Estate market.
On the back of a strong market performance in 2016, 2017 continued to show improved confidence in the property sector as is evident by the increased activity levels, both in terms of transactions as well as issued building permits.
Government schemes encouraging foreign direct investments, have stipulated interest from foreign buyers, which has been a driving force for the market.
Transaction Volume: Sale contracts
The number of sale contracts filed at the DLS across Cyprus exhibited a 20% increase compared to 2016
The increase in real estate property transactions observed in H1 2017 was largely driven by:
- The continuation of property tax incentives and the government’s schemes encouraging direct investments in Cyprus, which have attracted mainly non-EU buyers (Chinese, Russian, Indian and UAE);
- Increase in the demand from the domestic market in the residential property sector.
Real Estate Price Evolution
Following a negative trajectory in the RICS Residential Index during the years 2010-2015 which turned positive in 2016, there was a further 4% increase as per the RICS Index during 2017
Foreign transaction activity
Further increase in demand from foreign buyers was recorded during H1 2017, with sale contracts filed by foreigners recording a 106% increase compared to H1 2016. Paphos and Limassol appear to be the preferred cities by foreigners during this period.
The highest number of sale contracts filed by foreign buyers, was recorded in Paphos (37%), followed by Limassol (33%) and Larnaca (16%).
The large majority of sales to foreigners relate to residential properties.
High-end Residential Property Segment (≥€1,5mln)
59% increase in sale contracts for high-end residential properties compared to 2016
In terms of value, a 34% increase was recorded in building permits issued across Cyprus
Author – Derek Watkins https://www.linkedin.com/in/derekwatkins/
Originally Published on February 7, 2018