19.06.2023
The Cyprus property market is experiencing the most active year since 2008 in 2023, as can be seen from the total number of sales contracts submitted to the Land Registry during the first five months of the year.
Following the same metric, it is clear that the Cyprus property market is experiencing the most foreign-dependent year of sales since 2007. More specifically, foreign sales account for 46% of total sales in 2023, up from 43% in 2008.
Continuing the analysis of this dataset, in 2023 the percentage of foreign sales in the Cyprus real estate market is the highest ever recorded, with the exception of 2006 and 2007 when foreigners accounted for 49% and 53% respectively on an annual average. These figures underscore the significant reliance on foreign buyers in the current market and highlight the continued interest of foreign buyers in the property sector in Cyprus.
Real estate prices
According to the Central Bank of Cyprus, housing prices record an annual increase in all regions. In particular, house prices in Nicosia rose by 2.9%, in Limassol by 7.1%, in Larnaca by 3.3%, in Paphos by 10.4%, and in Famagusta rose by 4.2%. Apartment prices rose strongly in all regions: by 4.3% in Nicosia, 9.3% in Limassol, 9.4% in Larnaca, 8.6% in Paphos and 5.1% in Famagusta.
This strong rise in prices is mainly due to the policy of the headquarters, which, according to market data, attracted about a thousand foreign companies in 2022. First of all, these are companies from Russia, Israel, Ukraine, Great Britain, Lebanon and Belarus.
Cost increase
According to the Central Bank of Cyprus, the increase in interest rates of the European Central Bank (ECB) has led to an increase in the cost of borrowing. However , this increase did not have a significant impact on the overall demand for real estate. At the same time, it significantly affected the demand for new housing loans. The fourth quarter of 2022 saw a 25.2% decrease in new home loans compared to the previous year. These data indicate that the increase in interest rates had a significant impact on the availability of home loans.
Rising interest rates and building costs are a discouraging factor for Cypriots considering buying property. However, there is a notable group of potential buyers who are actively seeking to take advantage of the current opportunity by purchasing property from the existing stock of new homes prior to the change in VAT reduction policy. This is especially true for properties that may not meet the newly established criteria for size and value.
