The year 2023 was a very productive year for the real estate sector in Cyprus. The island nation set a new record for the number of transactions concluded.
On Tuesday, April 9, Deloitte published its annual report on the analysis of the real estate market in Cyprus.
It shows that in 2023 on the island signed 25.4 thousand sales contracts totaling 5.6 billion euros. The trend of significant growth is mainly due to transactions with residential real estate - 13.2 thousand sales totaling 3.4 billion euros or 61% of the total volume of transactions in the sector. At the same time, the average transaction value in this category in 2023 amounted to 259 thousand euros, compared to 257 thousand euros in 2022. The slight increase was mainly due to new properties, which accounted for 69% of total residential sales.
The second most popular real estate category for investors in 2023 was land. In this segment concluded 11.2 thousand transactions totaling 1.9 billion euros (34% of the sold objects). The average value of a land transaction amounted to 168 thousand euros against 175 thousand euros in 2022. The decrease is partly due to a higher volume of transactions in Nicosia and Larnaca, where the average transaction value is historically lower than in Limassol and Paphos.
This is followed by commercial real estate - the total value of transactions in this category amounted to €121 million or 2% of the sector's total value. The average transaction value of commercial real estate in Cyprus in 2023 amounted to 238 thousand euros compared to 262 thousand euros in 2022. This trend is due to a drop in the number of new real estate transactions in Limassol.
If we look by city, the palm of leadership is still held by Limassol.
It accounted for 41% of the total sales value in 2023, while all other cities, except for Larnaca, recorded slightly lower sales volumes compared to 2022. It is worth noting that Larnaca recorded an impressive increase in sales value compared to 2022 (+28%), due to both an increase in transaction volume and a higher average property value. It is important to mention that Larnaca recorded growth for the third consecutive year. Moreover, this Cypriot city has almost doubled both the value and the volume of transactions since 2020.
The ratio of local to foreign property buyers remained generally stable from 2018 to 2023: around 55% local and 45% foreign. The only exceptions to this rule were 2020 and 2021, which were heavily impacted by COVID-19 and related travel restrictions.
Traditionally, Nicosia and Limassol attracted the largest number of local buyers. However, Larnaca and Paphos recorded an increase in local interest in housing in 2023.
Limassol and Paphos continue to attract foreign buyers, while Larnaca also recorded record interest from them in 2023. However, the profile of foreign investors varies between these cities. For example, Paphos attracts more investments related to vacation homes, while Limassol and Larnaca attract the most foreign buyers who invest in real estate for investment and commercial purposes.
The report also made up the results of a survey conducted by Deloitte among industry professionals. The survey shows that in 2024, Cyprus is not expected to see significant changes in the real estate sector, as well as an increase in sale and rental prices.
Furthermore, according to the survey results, mid-range apartments are expected to maintain their position as the most attractive investment opportunity over the next 12-18 months. But demand for luxury apartments in high-rise complexes is likely to decline.