Overcoming the challenges of recent years, the Cypriot economy has followed a solid growth path and has maintained its status as one of the fastest growing economies in Europe.
Last year was one of the best in recent years regarding property sales and investments, focusing on the tourist industry, investments for the acquisition of a Cyprus passport and residency, the sale of houses and apartments as well as large investments in plots.
Overcoming the challenges of recent years, the Cypriot economy has followed a solid growth path and has maintained its status as one of the fastest growing economies in Europe. Investing in real estate in Cyprus is worthwhile for foreign and local investors for all types of property. The growth in real estate and housing demand, both domestic wise and internationally wise, caused an increase in property prices and in rents. The growth of the real estate sector is expected to continue as the factors connected to the growth remain strong and will therefore keep the demand at a high level, pushing prices upwards. For example, the decrease in deposit interests and the low-interest housing and corporate loans encourages depositors to invest their money in real estate. The fact that investments in real estate are made through own funds rather than through loans create a healthy and controlled property market adding value to properties but at the same time avoiding the financial bubble of the past.
Interest from foreigners, and mainly from non-EU buyers, continues to be the driving force for the market as it brings money to the market and this is mainly fuelled by various government incentives and the continuation of the government schemes encouraging further investment in Cyprus. The Cyprus Investment Program as well as the increased domestic demand and the numerous new investments in tourism infrastructure have given the formerly ailing real estate sector a revitalising boost. Furthermore, the execution of major developments in various areas of the island, such as the marinas, shopping malls and mixed developments attract new investors and strength the real estate market while enhancing Cyprus’ competitiveness as a country. Real estate sector constitutes one of its pillars together with low tax rates, the high quality of services and the quality of life that Cyprus offers.
The growth in real estate transaction activity levels observed in 2017, continued with a similar pace during 2018 reflecting a 24% increase in the number of Contracts of Sale with Famagusta having the biggest increase with 72%, followed by Nicosia with 34%. Building permits continued their upward trend both in terms of volume and value with Famagusta having the biggest increase in terms of value with 86% compared to 2017. Non-nationals in 2018 bought 103% more properties compared to 2017, reaching a 48% share of the overall market. The remained increased activity levels both in terms of transactions and new permits for development continue showing the improved confidence in the real estate sector of Cyprus.
Commenting on what lays ahead for the sector in 2019, the Chairman of the Cyprus Property Owners Association, Mr George Mouskides said that he expects sales to increase by another 5% to 10% reaching a healthy growth for a real estate market. Although property value is on the rise, he expects prices to be held down by the increase of property on the market and sales to stabilise over the coming years with the sector staying away from risks of a bubble being created.
