Foreign investors in Cyprus are increasingly looking to more affordable residential properties, driven by the desire to obtain residency rather than citizenship. This trend, identified in Danos’ 2023 study, illustrates the changing structure of demand in the property market.
The Cyprus property market has seen significant changes in recent years. In the past, foreign investors actively purchased luxury properties to obtain Cypriot citizenship, but with the end of the “golden passport” program, their interest has shifted to more affordable offers that allow them to obtain a residence permit.
In 2023, sales of luxury properties, those priced above €1.5 million, fell significantly. This segment of the market declined, although there was a slight improvement in early 2024, but the overall market is still recovering from the sharp drop in sales in 2023. In that year, luxury property sales were down 26% compared to 2022. In total, 164 transactions were registered in 2023 with properties priced above €1.5 million, amounting to around €440 million. Despite the large sums, luxury properties accounted for only 8% of the total market, the lowest figure in the last decade.
The biggest increase in demand for luxury properties was seen in 2017, when many foreign investors purchased properties for citizenship under the Cyprus Investment Programme. At that time, 260 properties were sold for over €1.5 million, up 24% from the previous year. This surge in sales helped to revive the overall property market, which had suffered due to the 2013 financial crisis.
With the end of the citizenship program in 2020, sales of luxury properties began to decline, and investor interest shifted towards more affordable options that provide the opportunity to obtain a residence permit. According to Danos , since 2014, demand for luxury properties began to grow rapidly, reaching a peak in 2017. However, after the program closed, interest shifted to the mid-price real estate segment.
Despite the current difficulties, the property market in Cyprus is expected to continue to grow at a moderate pace, according to experts. As noted by Kyriakos Kiliaris , Marketing Director of Danos , stabilization of interest rates can play a key role in supporting demand. Although the luxury real estate market is unlikely to return to 2017 levels, foreign investment will continue to have a positive impact on the development of the market as a whole. In particular, the geopolitical situation, including tensions in the Middle East, continues to attract the attention of foreign investors, especially from Europe and Asia.
The real estate investment program, better known as the “golden visa,” remains an important tool for attracting foreign capital despite rising construction costs and new regulations.
