It appears that the removal of citizenship from the investment program did not affect the real estate market, with property sales contracts expected to exceed 15,000, according to the Cyprus Real Estate Market Report for the 2nd Semester 2023 prepared by Danos & Associates.
The report acknowledges the market’s resilience, but it warns against underestimating the emerging challenges.
According to the report, the real estate sector significantly contributes to the Cypriot economy, and the government must find ways to support and maintain its momentum.
During the second quarter of 2023, a total of 5,974 transactions, amounting to €1.52 billion, were recorded in property sales.
However, there is a decrease both in value and volume of transactions compared to the first quarter. On an annual basis, transaction volume during the second quarter of 2023 remains similar to the corresponding period in 2022.
Nevertheless, the total value of sold properties increased significantly, reaching €1.2 billion.
In the second quarter of 2023, sales reached 7,689, representing a 23% increase compared to the same period in 2022.
From the beginning of the year until the second quarter of 2023, the national housing price index increased by 7.42% (5.41% adjusted for inflation). Quarterly, prices rose by 1.46% (1.15% adjusted for inflation) in the second quarter of 2023.
Specifically, Nicosia and Famagusta were the only regions showing an increase in property value during the second quarter compared to the first quarter.
In Nicosia, despite a reduction in the volume of sales transactions, the value of properties amounted to €299.8 million. Similarly, in free Famagusta, the increase in value of approximately €59.7 million is accompanied by an increase in the volume of sales transactions (303).
In contrast, the Limassol region experienced a significant decrease. The value of sold properties in Limassol decreased by €200 million compared to the first quarter, reflecting a substantial reduction in the volume of sales. Paphos and Larnaca provinces also saw a decline in the real estate market during the second quarter. Paphos experienced a more significant decrease in both property value and transaction volume. In Larnaca, while the transaction volume increased, the value of sold properties was slightly lower.
Undoubtedly highlighted in the report is the driving force of the market, the apartments. Demand is driven by the increasing interest of foreign companies in relocating their activities and personnel to the island, especially in coastal areas.
Regarding the commercial property sector, the report notes that many companies, including global giants, choose to establish their offices in Cyprus due to the lifestyle, strategic location, and advantages of the tax system.
However, it is emphasized that many commercial buildings are outdated, and with this influx of global companies, modern buildings are needed.