16.05.2024
The latest analysis of sales contracts published by the Cyprus Land Department shows that foreign buyers have recently preferred to purchase properties in the less expensive areas of Larnaca and Famagusta rather than in Paphos and Limassol.
Property sales in Larnaca to foreign buyers are increasing due to increased interest from Israeli investors. At the same time, other foreign investors looking for holiday apartments are turning their attention to Famagustuya.
However, the future development of the marina and port of Larnaca is now under threat. It is likely that the Minister of Transport and Communications Alexis Vafeades may terminate the contract with Kition Ocean Holdings and Round Town. In one of his addresses, the minister said that “the contract concluded with the contractor company is very complex. However, in case of its termination, there is a provision according to which the management of the port, which is one of the main operational infrastructures of the state, must be transferred to the Port Authority within 30 days. We have now lost all hope that the contracting company intends to extend the €10 million guarantee and continue construction of the project, so we are acting on our own responsibility to protect the public interest.”
Only time will tell how this will affect future property sales in the Larnaca area.
Contents
Why is interest in Paphos and Limassol decreasing from foreign buyers?
One possible reason for the decline in the number of foreign buyers in Paphos and Limassol is the revised rules for obtaining permanent residence in Cyprus. Currently, these rules require the applicant to invest a minimum of €300,000 in real estate and have a guaranteed annual income from abroad of €50,000 + an additional income of €15,000 per spouse and €10,000 for each child.
Parliament is currently debating legislation to replace the F application process, which has failed to gain approval over the past few years, despite still working in theory. The proposed rules would lower the investment threshold to €250,000 and reduce the income requirement to €40,000 for an applicant, with an additional €10,000 for each dependent.
AKEL also made a proposal to relax the law. They want the government to allow foreigners to obtain citizenship, even if they do not speak Greek well. At the same time, candidates will need to have a good understanding of the main elements of the modern political and social reality of the Republic of Cyprus.
Market segment analysis
Sales to the domestic (Cypriot) market
Total domestic sales in April 2024 were up 34% year-on-year and accounted for 63% of total sales for the month.
With the exception of Paphos (where sales fell by 26%), sales in Limassol , Nicosia, Larnaca and Famagusta increased by 55%, 48%, 36% and 7% respectively.
Sales to the domestic market in the first four months of 2024 reached 3,001 transactions; hence, an increase of 20% was recorded compared to the 2,504 transactions achieved during the same period last year. With the exception of Famagusta , all districts recorded an increase in sales.
Sales to foreign market
The total number of property sales on the overseas market (to both EU and non-EU citizens) fell by 8% in April 2024 compared to the same month last year.
Sales growth in Larnaca , Famagusta and Nicosia was overshadowed by a 46% drop in property sales in Paphos and 6% in Limassol . However, in terms of the number of properties sold to overseas buyers, Paphos remained the most popular.
Year-on-year, property sales to overseas buyers were up 16%, with sales up in all areas except Famagusta . Despite the recent drop in sales, 2023 saw the highest number of overseas sales since 2007.
Property sales to overseas buyers reached 1,962 units in the first four months of 2024; a drop of 13% was recorded compared to the 2,262 transactions achieved during the same period last year. With the exception of Limassol and Paphos, all districts recorded an increase in property sales.
Sale of real estate to EU citizens
Sales to EU citizens were up 4% in April compared to the same month last year, accounting for 11% of the total sales (1,366) achieved during the month.
While sales increased by 133% in Nicosia, 60% in Larnaca and remained stable in Famagusta , they fell by 36% and 13% in Limassol and Paphos respectively.
Sales to EU citizens reached 563 transactions in the first four months of 2024; registered a 4% drop in property sales compared to the same period last year everywhere except Nicosia and Famagusta .
Sales to non-EU citizens
Property sales to non-EU nationals fell 12% in April compared to the same month last year, accounting for 27% of total sales (1,366). Although sales increased in Famagusta and Larnaca , they decreased in the other three districts.
Property sales to non-EU citizens reached 1,399 in the first four months of 2024; a fall of 17% was recorded compared to the same period last year, with the fewest sales occurring in Limassol and Paphos.
