Source: Cyprus Property News
by Nigel Howarth
The future of the Cyprus real estate market is unpredictable. Rising inflation and increasing fuel prices have resulted in an approximate 10% hike in construction costs in recent months.
The total number of sales in March 2022 rose 33% compared to March 2021; the highest March figure recorded since 2008.
With the exception of Nicosia, sales rose in all districts with the highest number of sales recorded in Limassol, followed by Nicosia, Paphos, Larnaca and Famagusta.
Sales during the first quarter of 2022 reached 3,009, a 52% increase on the 1,985 sales achieved during the first quarter of 2021.
The future
The future of the Cyprus real estate market is unpredictable. Rising inflation and increasing fuel prices have resulted in an approximate 10% hike in construction costs in recent months. Travel costs and the general cost of living have risen, all of which add up to make Cyprus less affordable. Inflation currently stands at 7.1% and interest rates are expected to rise.
War in Ukraine
Speaking to the Cyprus News Agency the Chairman of the Real Estate Registration Council Marinos Kynageirou said “Many companies based in Ukraine and Russia are moving their staff to Cyprus, resulting in increased demand for housing units, especially in Limassol, a phenomenon that is expected to continue in the coming months.”
A few days ago, the video gaming company Wargaming, which is headquartered in Nicosia, announced its decision to leave Russia and Belarus.
Antonis Louizou noted that “It is too early to say for sure to what extent the Cypriot real estate market will be affected by the war in Ukraine.”
Domestic property sales
Although domestic sales in March saw an overall rise of 6% compared to March 2021, sales in Famagusta, Nicosia and Paphos fell. These falls are probably due to the conclusion of the subsidized purchases through the government scheme at the end of 2021.
The scheme provided an interest subsidy of 1.5% for a period of four years for loans not exceeding €400,000 for house purchases. As it takes 2 or 3 months to process applications for the scheme, it’s possible that we may also see falls in Larnaca and Limassol.
It’s also worth bearing in mind that the figures include an unreported number of ‘non-sale’ agreements such as loan restructurings, recoveries and debt-to-asset swaps agreed upon between the banks and defaulting borrowers. Unfortunately, the Department of Lands & Surveys doesn’t record these separately.
The highest number of sales was recorded in Limassol, followed by Nicosia, Larnaca, Paphos and Famagusta.
Sales during the first quarter of 2022 reached 1,732, a 24% increase on the 1,399 sales achieved during the first quarter of 2021.
Foreign property sales
Property sales to foreigners (non-Cypriots) performed well with sales up 105% compared to March 2021 with sales rising in all districts with the exception of Nicosia.
Paphos achieved the greatest number of sales, followed by Limassol, Larnaca, Famagusta and Nicosia.
The interest shown by foreigners in buying their ‘home in the sun’ has increased following the Cyprus government’s decision to relax COVID restrictions, which now allows travelers who have been fully vaccinated or recently recovered from COVID to enter the country without any further testing on their arrival.
Sales during the first quarter of 2022 reached 1277; a 118% increase on the 586 sales achieved during the first quarter of 2021.
Foreign sales (EU Nationals)
Sales to EU nationals performed well with sales up 104% compared to March 2021 with sales rising in all districts with the exception of Nicosia, where the number of sales was unchanged.
Paphos recorded the largest number of sales, followed by Limassol, Famagusta, Larnaca and Nicosia.
Sales during the first quarter of 2022 reached 626; a 142% increase on the 260 sales achieved during the first quarter of 2021.
Foreign sales (non-EU Nationals)
Although sales to non-EU Nationals rose by 106% compared to March 2021, sales in Nicosia and Famagusta fell for the second consecutive month.
The largest number of sales were recorded in Limassol, followed by Paphos, Larnaca, Nicosia and Famagusta.
Sales during the first quarter of 2022 reached 646; a 99% increase on the 326 achieved in the first quarter of 2021.
Nigel Howarth is an independent property advisor helping home seekers and property investors looking to buy property in the Republic of Cyprus.
