The pandemic has made new adjustments to the development of the real estate sector around the world. What is happening in Cyprus now? Let's try to get the big picture.
Events that have changed the position of the Cyprus property market
The pandemic is the most important event to affect demand and pricing in the Cyprus property sector. Sales froze for a while, and then slowly went up.
The total number of sales in 2021 do not yet reach the level of 2019 (pre-pandemic time). But the positive dynamics is obvious - it is worth taking a look at the statistics (see below).
The second event is the suspension of the passport by investment program. Everything is because of the scandal, when a number of high-ranking officials were caught selling passports to unreliable foreigners.
This is Cyprus, everything is possible here, one of the corrupt officials said like this.
From November 1, 2020, the program has been suspended. Many foreign investors have abandoned real estate transactions in favor of other countries.
Now Cyprus is engaged in a thorough check of all citizens who received Golden passports, as well as those who issued these passports. These are officials, developers, etc.
Whether the Citizenship by Investment program will return, at least in a modified form, is not yet known.
What does the statistics say?
To understand the whole picture, it is worth comparing the indicators of the last three years. Numbers speak more expressively than words. Let's compare the periods from January to July of each year inclusive:
- number of transactions: 6456 (in 2019) - 4097 (in 2020) - 5365 (in 2021)
- number of transactions with foreign buyers: 2005 (in 2019) - 1,077 (in 2020) - 1,753 (2021)
- total deal value: € 4.4 billion (in 2019) - € 3 billion (in 2020)
- number of transactions with luxury real estate (more than 1.5 million euros): 318 (in 2019) - 176 (in 2020).
We can see that the pandemic and the cancellation of the Golden passports program in 2020 hit the elite real estate sector the most, first of all, new buildings. Compared to 2019, the decline was almost half of both the number of transactions and their total value. At the same time, the housing market of the economy and middle class has lost only a third.
What is interesting... the first half of 2021 showed that Cyprus could return to its former life. Moreover, some pre-pandemic records have already been broken.
- number of building permits: about 1600 (in 2019) - about 1500 (in 2020) - about 1800 (in 2021)
- investment amount for the first quarter of the year: 402 million euros (in 2019) - 450 million euros (in 2020) - 500 million euros (in 2021).
It is obvious that the real estate market is recovering now. Moreover, a great demand is observed even in the field of elite primary real estate. If earlier investors from Russia, Ukraine, Belarus, China and the Middle East were interested in the island, now European millionaires have joined them.
All this gives rise to great hope and makes it possible to assume: in the coming year, prices for new buildings will remain at the current level, and later will creep up. Therefore, right now, investors will be able to make the most profitable investment in real estate in Cyprus.
Prices are rising: is it profitable to buy now?
As mentioned above, now is one of the best times to invest or buy to move in. The thing is that Cyprus shows an insignificant increase in prices because of a price jump in the European market.
However, this cannot be considered some kind of a miracle - it's just a delay. Cypriot real estate prices will catch up with Spanish, British, Portuguese, etc. And this will be a tangible rise.
Of course, one can argue that prices for new buildings have already risen by 10-15% due to the rise in prices for building materials. But there are two essential points here.
First: the rise in prices for new buildings has occurred all over the world. Some countries show price increases as much as 30%. Therefore, buying a new home in Cyprus is still a profitable investment.
Second: the rise in prices due to the rise in prices for building materials practically does not apply to new buildings that are about to be commissioned.
Another argument in favor of Cyprus: the European Central Bank (ECB) keeps mortgage rates low. And now the average percentage on the island is about 2%, which is low compared to other European countries.
Finally, Cyprus continues to be encouraged to buy expensive properties. And although you can't get a passport by buying real estate now, you can always participate in a program for obtaining permanent residence. To do this, you need to purchase one or more housing units with a total cost of 300 thousand euros.
Summing up the interim result, we can conclude: property prices in Cyprus will inevitably begin to rise in the near future. This will be especially vividly reflected in the primary real estate market - new buildings.
The remaining months of 2021 are the best time to buy.
Features of the new buildings market in the districts of Cyprus
This is not to say that the districts of Cyprus are fundamentally different from each other. Nevertheless, there is a specificity in each of them, and the difference in prices is big. Therefore, it makes sense to focus on each place.
The capital of Cyprus is not so interesting for foreign investors - all because the city cannot be considered a resort place. You need to drive about 40 km to the sea in any direction, which affects the demand among foreigners.
Nicosia primary real estate is of interest to local residents as well as students. This is where most of the universities are located. Also, the capital has a developed cultural life and good infrastructure.
What investments are profitable to make in Nicosia:
- commercial property
- long-term rental housing of any class (from economy to elite)
- studios for students or teachers near universities
- buying a home in order to be closer to the business in the city.
Short-term rentals in Nicosia are not very popular, but there is an exception - this is the historical center of the city.
The most active coastal city at the moment. It is famous for several of its features at once:
- there is the sea, as well as beaches and access to the most beautiful Cypriot mountains
- developed infrastructure
- large scope for business - both small and international
- multinationality - a lot of Russian-speaking people, immigrants from the Middle East and the EU
- has everything to be called a real resort town.
Almost all foreign buyers pay attention to Limassol. It is convenient here to do business, raise children, enjoy the sea and clean air, go out into nature, lead a cultural, sports and party life.
You can invest in absolutely any real estate sector in Limassol. Here, both short-term and long-term rentals will give a good income (up to 10% per annum). Both land plots and commercial properties are very popular.
At the moment, the primary real estate market in Limassol is the largest in the whole of Cyprus. There are a lot of new buildings of various classes and calibers.
The second most popular among foreign buyers. Prices here are lower than in Limassol or Nicosia: a square meter can be purchased for 1000-1500 euros. There is also enough of any type of real estate - from economy to elite class.
The only thing worth paying attention to is the specificity of the new buildings. Residents and the municipality of Paphos want to preserve the authentic look of the ancient city, therefore they actively oppose multi-storey buildings. So 4-5 floors is the maximum for the center of Paphos, especially the Old City. But, there are also exceptions.
The primary real estate market in Paphos is represented mainly by villas, cottages and townhouses. They can be found both free-standing and in a gated complex.
Investing in real estate and living in Paphos has its advantages:
- there is a demand for long-term and short-term rent
- has a well-developed sports infrastructure, competitions of world and European level are often held here
- there is an airport nearby
- the city is calm and quiet
- quite developed cultural and social life
- excellent ecology and luxurious nature.
Many people abandon the noisy and hectic Limassol and go to Paphos - especially when it comes to living with family and children.
Another large city that has just begun its ascent. Unlike Paphos, Larnaca (also an ancient city) decided not to abandon the construction of high-rise buildings. In the central part and in the suburbs of the city, construction of new complexes is in full swing. You can get to know them better in our article.
Property prices in Larnaca are now significantly lower than in other cities in Cyprus. And this applies to both the elite sector and conventional new buildings. Therefore, Larnaca is ideal for long-term investment.
In addition, the city has the largest airport on the island and is considered a good resort. Therefore, Larnaca may well grow to the level of Limassol - there are suspicions that this is just a matter of time.
A selection of new buildings in Cyprus, which will be commissioned in 2022
Everything that is said above is the "theoretical part". Now let's see what the market for new buildings in Cyprus is like, using examples of different objects.
1. Blu Marine in Limassol Center
One of the most recognizable, tall and beautiful luxury complexes in Limassol is Blu Marine. Located right on the coast, near the marina, it solves 2 tasks at once: an excellent overview (including sea views) and the availability of all facilities.
Several swimming pools, spa areas, parking, restaurants and concierge services are not the only ones available to future residents of the complex. Other amenities are also envisaged: from a well-maintained adjoining area to management and cleaning services.
2. Dream Tower, Limassol, Mouttagiaka
The nearest suburb of Limassol is a calm and at the same time comfortable place. Mutayaka is suitable for both life and relaxation!
The 27-storey Dream Tower is an example of modern architecture that stands out from the rest of the buildings. The entire infrastructure is five-star hotels, luxury restaurants, boutiques and even a yacht supermarket! Needless to say, any floor of the Dream Tower offers truly breathtaking sea views?
3. Soho Resort, Kato Paphos
A rarity for Paphos: multi-storey buildings, and in two copies at once. One tower has 15 floors, the other has 16 floors. For lovers of privacy and private space - there are villas around high-rise buildings.
The Soho Resort complex is located in the central part of the city, just a hundred meters from the sea. This makes it possible to visit public beaches, as well as easily get to the necessary establishments. However, half of them are already on the territory of the complex: swimming pool, fitness and spa, parking, restaurants, shops, playgrounds, etc.
4. Mari-Blu Residence, Larnaca, Harbor
Almost the center of the city, and just 800 meters to the sea! At the same time, everything you need is nearby: shops, markets, bars and restaurants, schools and kindergartens, large shopping centers and transport interchanges.
Mari-Blu Residence's main advantage is its intimacy. The complex includes only 9 apartments, parking, storage room, and green area is provided for all residents. Well, a plus - stylish architecture.
Interested in housing in Cyprus? Visit the DOM Real Estate. The portal has the largest database of real estate in the country - from residential to commercial. Choose and contact professionals who will help you make the right choice!
- First acquaintance with Larnaca (link)
- Where to live in Limassol? Coastline vs mountains (link)
- Paphos Real Estate Market Overview (link)
- Paphos vs. Limassol. All the pros and cons (link)
- Permanent residence permit in Cyprus (link)
- Investment in real estate in Cyprus (link)
- TOP 6 apartments in new buildings with breathtaking views in Cyprus (link)
Photos: pixabay.com, free images.google, dom.com.cy