Improvement in property sales in Cyprus continues, with overseas buyers back
The residential property market in Cyprus is continuing to see a recovery in sales with the latest official figures showing that transactions increased by 18% in July compared with the same month in 2016.
This comes on top of a 28% rise in June and a 59% increase in May, although sales di fall back by 2% in April, according to the statistics from the Department of Lands and Surveys.
Sales improved in all areas apart from Larnaca which recorded a fall of 16% year on year. They were up by 119% in Famagusta rose 119%, up 22% in both Nicosia and Limassol and up by 20% in Paphos.
There has also been a rise in the number of overseas buyers returning to the property market, up 31% compared with July 2016. Sales to overseas buyers rose in all areas, led by a rise of 263% in Famagusta, up 88% in Nicosia, up 28% in Larnaca, up 17% in Limassol and up 15% in Paphos.
Meanwhile a new analysis report from PwC shows that total sales in Cyprus reached a six year high in 2016 with a rise of 43%. They increased by 59.4% in Limassol, by 40.2% in Paphos, by 37.7% in Nicosia, 34.6% in Famagusta and by 26.9% in Larnaca.
The Cyprus real estate review report says that the increase in transactions in 2016 was largely driven by the introduction of property tax incentives and the Government’s citizenship programme which has attracted mainly non-European Union buyers, most notably from China, Russia, India and the United Arab Emirates.
An increase in relatively cheap available debt funding, as a result of intense competition in the banking sector combined with excess liquidity on banks’ balance sheets also helped.
When it comes to prices the report shows that they continued to fall after the global credit crisis until 2015 when they began to stabilise, as shows by figures from the Royal Institute of Chartered Surveyors (RICS) and the Bank of Cyprus.
Overall prices fell by 27% to 33% compared to 2010 values but in 2016 both indices showed a rise of 1%.
The figures show that foreign buyers deserted the market, with sales to overseas buyers down by 50% between 2010 and 2013. Throughout 2014 and 2015, demand from foreign buyers increased and there was a significant increase of 34% in 2016 to a six year high.
During 2016, the highest volume of sales to overseas buyers was 35% in Paphos, 34% in Limassol and 18% in Larnaca. Sales have also risen for the top end of the market with citizenship and visa offerings attracting wealthy buyers from overseas.
From 2014 onwards and following revisions to the Cyprus citizenship programme for foreign investors, demand for high end properties increased substantially. By 2016, the number of high end residential transactions had almost quadrupled compared to 2013, with the majority in the €2 million to €3 million sector.
Demand for properties in excess of €3 million has been increasing over the years and the report says that this is largely the result of the launch of new high end residential developments in the market increasing the supply of units of this price range.
Limassol has actively responded to the increased demand for this type of properties with an increasing number of high end residential projects currently being developed or planned. Accordingly, Limassol has been the preferred location for overseas buyers with 63.2%, followed by Paphos with 29.9%.
During 2016 some 70% of high end residential property sales in Limassol were apartments whereas in Paphos all sales on this bracket were villas. Nicosia, Larnaca and Famagusta were the least active with 1% to 5% of high end sales.