2020 has obviously been a challenging year in every sense. For Cyprus it was especially difficult due to a number of reasons (we will talk about them below). A decline in housing prices was recorded in some countries, while other countries, on the contrary, showed a sharp jump.
Who is in the top of the countries with growing prices? The Global House Price Index was compiled by the British agency Knight Frank for the period III quarter of 2019 - III quarter of 2020.
10th place: Croatia (8.3%)
The largest increase in property prices is interestingly observed not in the capital or on the coast, but in the rest of the country. The prices here increased to more than 9%. Zagreb, the capital of the country showed the lowest growth: only 5.7%. The Adriatic coast slightly bypassed it, as housing prices here rose by 7.5%. It should be noted that the largest growth occurred in the secondary real estate sector.
Croatia is famous for its high quality housing. Here they buy real estate for permanent holidays or for doing business in Europe. The average price per m2 is EUR 1500, and EUR 2000 is in seafront resort areas. Luxury real estate in Croatia starts at EUR 5,000 per m2.
9th place: the Netherlands (8.5%)
The rise in property prices in the Netherlands is a common thing in recent years. However, the coronavirus has had a huge impact on the market. Thus, supply and demand have leveled off. Therefore, for the first time in a long time, experts started talking about an imminent decline in prices.
The greatest interest of buyers was focused in 2020 on budget housing, costing from EUR 250 to 350 thousand. As a rule, these are local residents who buy real estate for themselves and their families. Foreigners buy housing mainly for student children who come to the country to study. Another purpose of the deal is renting out.
8th place: Russia (9.2%)
Coronavirus and the fall of the ruble became a reason for the increasing real estate prices in Russia. Buyers wanted to invest in their housing before the currency depreciation. This was also facilitated by the decline in mortgage rates.
Due to the increased demand, housing prices have also increased. Colossal growth was recorded in the Moscow region as it was by 21%. The growth in Moscow itself turned out to be a little less: by 19%. In the rest of Russia, price increases were less.
At the same time purchases of foreign real estate by Russians fell sharply. This is primarily due to the closed borders due to the pandemic. But those who bought real estate abroad preferred mainly Turkey or the UAE.
7th place: Austria (9.5%)
Buying real estate in Austria for a non-EU resident is not an easy task. To purchase a house or apartment, you must apply for one of the types of residence permit. Therefore, most buyers of Austrian real estate are Europeans who come to the country to study or work.
Housing prices in Austria are quite high. The cost per m2 is on average EUR 5,000 in cities and villages. In the capital city of Vienna, prices are significantly higher: they can range from EUR 7 000 to 17 000 per m2.
6th place (Ukraine, 10.3%)
Coronavirus and the economic crisis make Ukrainians to invest their savings in real estate. And if in the 1st quarter of 2020 the demand for purchase was small, then during the 2-3 quarters there was a real boom.
Citizens bought apartments in bigger cities of the country: Kyiv, Odesa, Lviv and Kharkiv. The largest increase in prices in proportion to demand occurred in one-room apartments. Experts predict that prices will continue to rise in 2021, but no one has given the exact numbers yet.
5th place: Poland (10.9%)
In recent years, Poland has shown unprecedented economic growth. The well-being of the country and its citizens rises to a new level every year. More than half of local real estate buyers purchase property without taking credits, only at the expense of their savings and other resources.
Investing in Polish property right now is one of the most profitable. The fact is that demand significantly exceeds supply, which means that prices for m2 will grow in the coming years. Now they are $1800-2500 in Warsaw and $1000-1500 in other cities.
Experts see the greatest potential in Wroclaw: there is a very active development. The most profitable investment at the moment is the purchase of secondary housing in poor condition. You can renovate it which significantly increases its price.
4th place: Slovakia (11.8%)
The pandemic has had little impact on the real estate market in Slovakia. The rise in prices has been observed for several years, and experts predict that it will continue.
The most active price increases were observed in two-room and one-room apartments. Multi-room apartments and houses have not increased so much in value. Although, the demand for the latter has naturally grown. Now the apartment's price is about EUR 2 000 for m2, in a house it's about EUR 1 300. The highest price tag was recorded in Bratislava.
3rd place: Luxembourg (13.4%)
Luxembourg has shown a steady rise in property prices over the past few years. At the same time, housing remains in demand in different parts of this small country. You can invest in real estate in the capital, it is of interest to both business people and tourists.
Local resorts remain popular: Clervaux, Wiltse, Vianden, Mersche. There is always an opportunity to rent out accommodation to vacationers. Investors are also attracted by the variety of real estate objects: you can buy a medieval castle, a luxurious villa or an apartment in an elite new building.
2nd place: New Zealand (15.4%)
Interest in New Zealand real estate among foreigners is entering the most active phase. So, in the third quarter of 2020, almost 30% of real estate transactions fell to the share of foreign buyers.
Investor interest is driven by a steadily growing and strong economy, as well as the projected rise in housing prices. In addition, in New Zealand it is now possible to obtain a residence permit for investment. The average cost of 1 m2 is about $7000.
1st place: Turkey (27%)
The rise in prices for Turkish real estate has become more intense than ever. And this is during the pandemic! The thing is that the government announced a reduction in mortgage rates.
For the first time in a long time, local residents also became interested in real estate investments in Turkish resorts.
What about Cyprus?
Cyprus was ranked 41st in the Global House Price Index: prices grew by only 2.3%. Although before the pandemic, experts called much larger numbers.
Now, at the beginning of 2021, it is difficult to say what has impacted the Cyprus property market more strongly: the coronavirus or the closure of the Golden Passport program. So far, none of their analysts dares to say with precision what will happen next. It will take a little more time for the island's economy to recover after the border closure.
However, the demand for Cyprus property is not falling, especially in the middle class housing sector. Local residents continue to buy apartments and houses for their own needs.
All properties in Limassol and Paphos are presented on DOM.com.cy. You can always consult our specialists or read useful articles in the DOM LiVE section.
- Short-term residence permit in Cyprus. Expectation and reality (link)
- 7 reasons why you need a real estate agent in Cyprus (link)
- Luxury Real Estate in Cyprus (link)