Cyprus property market saw steady growth in 2018, but sales dipped in December
The last 12 months have been positive for the residential property market in Cyprus, but sales growth seemed to slow towards the end of 2018.
The latest analysis from KPMG points out that after a sharp drop in the property market in 2013, mainly due to an economic crash, it has rebounded every years since 2014.
Sales increased year on year by 43% in 2016, the largest rebound since 2013, and by 24% in 2017. Figures for the whole of 2018 are not yet available but the report says that it is on track to reach a similar amount to 2017.
It also says that the increase in sales has gone hand in hand with an improving economic situation which had led to improved domestic confidence levels and to an increase in domestic demand.
In addition, various Government incentives have not only increased domestic demand, but have also led to a surge in foreign demand. These include the abolition of immovable property taxes, schemes for permanent residency and naturalisation of investors.
The analysis also shows that building permits increased by 8% in the first half of 2018 and by value by 20%. The biggest increase in numbers was a rise of 25% in Larnaca while Famagusta recorded the largest rise in terms of value at86% year on year.
Real Estate activity continued its upward trend in 2018 with sales up 21%. Limassol had the biggest share of the market at 37%, while Famagusta saw the biggest increase at 37% in sales. Overseas buyers bought 103% more properties compared with the first three quarters of 2017, reaching a 48% share of the overall market.
However, the latest figures from the Department of Lands and Surveys shows that in December 2018 sales fell by 48% compared to the same month in 2017. It was the first fall in transactions for 19 months in a row of rising sales.
But it may be not very significant as December 2017 saw a spike in sales of building land following the decision in November 2017 to introduce 19% VAT on land sales from the beginning of 2018, pushing up sales that month.
Sales fell in December in all districts, down by 73% in Famagusta, down 57% in Nicosia, down 45% in Limassol, down 43% in Paphos and down 34% in Larnaca.
But overall in 2018 the total number of sales were the highest on record since 2008 and they increased in all districts apart from Larnaca where they were flat. Year on year sales increased by 10% in Nicosia, by 8% in Limassol, by 5% in Paphos and by 2% in Famagusta.
Sales to overseas buyers remained positive. Some 38.6% of sales to foreigners were to buyers from the European Union. Paphos was the most popular district with overseas buyers, followed by Limassol, Larnaca, Nicosia and Famagusta.