Cyprus real estate soars despite challenges

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The real estate market remains robust and is on track to becoming the best-performing year since 2008, according to a report by Danos/BNPRE Group.

The report, covering the second semester of 2023, reveals a 23% increase in sales compared to the second quarter of the same year, reaching a record high in the past 15 years with 7,689 sales.

The total forecast sales contracts for 2023 are expected to surpass 15,000, exceeding the previous record of 13,409 in 2022.

During the second quarter, 5,974 transactions took place, totalling €1.52 bln in property sales.

In comments to the Financial Mirror, Panos Danos, CEO of Danos/BNPRE Group, said that Cyprus’ real estate market is experiencing significant recovery despite the economic uncertainties arising from the energy crisis, the conflict between Russia and Ukraine, and the recent conflict between Israel and Hamas.

“There is resilience of the real estate market and increasing challenges that consciously arise and should not be underestimated.

“The real estate sector significantly contributes to the Cypriot economy, and it is crucial for the government to find ways to support and maintain its momentum,” said Danos.

Need to remain vigilant

He noted that there was a decrease in both the value and volume of transactions compared to the first quarter, urging the sector’s stakeholders to remain vigilant.

On an annual basis, the volume of transactions remained similar to the corresponding period in 2022, while the value of properties sold increased significantly to €1.2 bln.

Nicosia and Famagusta were the only districts experiencing an increase in property values during the second quarter compared to the first quarter.

Despite a decrease in the volume of sales transactions, Nicosia recorded a value of €299.8 mln, while Famagusta saw an increase in both value (€59.7 mln) and the volume of sales transactions (303).

Limassol witnessed a substantial decrease, with the value of properties sold dropping by €200 mln compared to the first quarter, reflecting a significant decline in sales volume.

In Paphos and Larnaca, there was a decline in the property market during the second quarter.

Paphos experienced a more significant decrease in both value and volume of sales compared to the previous quarter, while in Larnaca, the volume of transactions increased, but the value of properties sold was slightly lower.

Mainly apartments

The driving force behind the market remains apartments, with a growing interest from foreign companies relocating their operations and staff to the island, particularly in coastal areas.

The data indicates that 9,000 apartments were transacted during the year, representing a 29% annual increase.

Cyprus’ housing market continues to grow, fuelled by strong domestic demand and returning foreign investors.

The nationwide residential property price index rose by 7.42% (5.41% inflation-adjusted) in the year to Q2 2023, with a quarterly increase of 1.46% (1.15% inflation-adjusted) in Q2 2023.

Overall, the real estate market in Cyprus remains dynamic, driven by both domestic and foreign demand.