Kathimerini.com.cy
Transaction volumes in the real estate and land development sector have surpassed those of 2019. According to the most recent PwC Cyprus publication, the total value of transactions in 2022 will reach €5.2 billion, representing a 27% annual increase. Total transaction volume was 22,500, a 12% increase year on year, surpassing even pre-pandemic levels of 2019 by 31%. The districts of Limassol, Larnaca, and Paphos saw double-digit growth rates in transaction volume in 2022 compared to 2021 (increases of 18%, 23%, and 31%, respectively). In contrast, the Nicosia and Famagusta provinces saw a 6% and 1% decrease, respectively.
The increase in apartment transactions from 2021 to 2022 was +29%.
Apartments were the driving force
Apartments were undoubtedly the driving force of the market in 2022, with €2.1 billion in transactions recorded, representing a 42% increase over 2021. The increased demand appears to be due to the arrival of foreign companies that chose to establish their headquarters in Cyprus and relocate their operations and staff to the country, with a focus on the coastal areas. Furthermore, the increased demand is due to resilient domestic demand. Apartment transactions reached 9,000 in 2022, up from 7,000 in 2021, a 29% increase.
Luxury properties worth more than €1.5 million continue to be in high demand
The cancellation of the Cyprus Investment Programme (effective November 1, 2020) reduced activity levels in the luxury property sector (€1.5 million). In 2022, there was a partial recovery of this sector, with a total of 220 luxury real estate transactions, registering a 36% annual growth and indicating that this sector remains active. Residential units worth €100,000 to €300,000 appear to be the most resilient segment of the real estate sector. Residential unit transactions ranging from €100,000 to €300,000 reached 7,600 in 2022, representing a 19% increase year on year. In 2019, there was a 41% increase over pre-pandemic levels. This is primarily due to increased demand for first homes and increased investment activity in rental housing (particularly for apartments), as well as increased demand from foreign buyers relocating to Cyprus.
Construction costs up by 30%
Despite rising property demand, as evidenced by the transaction data presented, the rate of building permit issuance slowed during the 10 months to 2022 (latest available data), registering a 5% annual decline. This is largely due to the continued rise in construction material costs in 2021 and 2022, with prices rising by 30% over a two-year period, disrupting market balances, particularly in the private/single housing sector. "In an environment where on a broader geopolitical level we face many challenges and crises, the Cypriot real estate sector, fuelled by the ongoing demographic changes observed on the island, has proven to be particularly resilient, exceeding expectations in terms of transaction levels," said Konstantinos Constantinou, Managing Partner of PwC Cyprus.
[This article was translated from its Greek original]
