What changes have occurred in the Cyprus property market in 2020

Какие изменения произошли на рынке недвижимости Кипра в 2020 году
24 December 2020 Liza Medvetskaya
2370

The year 2020 is drawing to a close. In this connection, it is fascinating to analyze the real estate sector's performance, which, according to generally accepted opinion, was significantly affected by the outbreak of the coronavirus pandemic and the abrupt closure of the Citizenship by Investment program.

From the beginning of the year until November, for which data are available, the real estate market movement showed a significant decline, especially during the lockdown period (April-May) compared to the corresponding period last year. However, during the summer months of June and July, the market seems to have recovered, reaching levels similar to the corresponding months of last year and partly reflecting (i) the positive response to the pandemic initially, (ii) the seasonal nature of the market, (iii) the development of the economy during the previous three years and (iv) the desire of the Cypriots to invest in real estate.

From January through December 2020, 11,246 transactions were recorded, totaling €2.44 billion. Compared to the corresponding period last year, transactions seem to have decreased by about -18.3% in volume and -22.7% in value. The largest decrease was recorded during the quarter of March-May, especially in April, where it reached -80.5% in work and -79.7% in value transactions. Despite recovery efforts in the months that followed, both volume and value transactions remained slightly lower than last year.

The real estate market is dominated by Cypriot buyers, who represent 81% of the total transactions, during the period January-November 2020, followed by buyers from the EU with 12% and foreigners outside the EU with 7%.

Despite the general picture of the real estate market, where it can be characterized as restrained, the behavior of foreign buyers is interesting. Transactions from foreign buyers showed an overall increase of 270.6% compared to the same period last year.

Specifically, during the reporting period, 2,142 transactions were recorded compared to 578 in the corresponding period last year. The largest increase came from European buyers (292% or 1,372 transactions), which account for 64% of foreign sales, while non-Europeans recorded an increase of 237.

Какие изменения произошли на рынке недвижимости Кипра в 2020 году

Proceeding our analysis in more depth, we quote below the primary data by province for the period January - November 2020:

Nicosia

The data show that Nicosia is the province that has been least affected by adverse external factors. During the above period, a total of 3,518 transactions amounting to € 739.2m were recorded. Compared to the corresponding period last year, transactions seem to have decreased -8.4% in volume and -9.8%. The largest decrease was recorded in April, where it reached -85.4% in work and -74.4% in transaction value. The significant recovery seems to have taken place in July, wherein significance it amounted to about 117.7% compared to the previous year. It is essential to mention that, in terms of trading volume, the four months August-November had a positive sign with an average growth of 18% compared to the corresponding period last year. 

More than any other province, Nicosia is dominated by Cypriot buyers, who make up 88% of total sales. They are followed by European buyers who make up 10% and non-Europeans with the smallest share of 2%. Transactions from foreign buyers in the province increased by 616.7% compared to the same period last year. European buyers recorded the largest increase of 726.5% and non-Europeans 325%.

Limassol

The District of Limassol seems to have been significantly affected by the decline of the sector as the trade volume decrease amounted to -21.2% in trading volume and -27.7% in value compared to last year. Beyond the first two months, the decline in trading volume was universal, with the largest -80.5%, being recorded in April. The annual increase in trading value in July and August, at 26.3% and 36.2%, respectively, did not appear to be able to contain the decline.

Limassol is an attractive destination for foreign buyers who, from January through November 2020, are responsible for 17% of total purchases. It is noteworthy that the annual increase in real estate sales to foreign buyers reached about 307% in a total of 513 transactions compared to 126 in the corresponding period last year. It is noted that deals for European buyers and non-Europeans are shared at 50%.

Larnaca

During this period, the trading volume decrease amounted to -22.6% and the value to -22.5% compared to the corresponding period last year. April was the month that recorded the largest decline with -76.1% in volume and -72.2% in value. Despite the upward trend of the following months until November, sales only temporarily surpassed the corresponding last year and remained negative. A particular case is the month of July, where, although the trading volume was reduced by -8.3%, the value of transactions increased by 48%. 

Following the trend of the previous years, Larnaca was also an attractive destination for foreign buyers in 2020, which accounted for 22% of all purchases during January-September. The interest of foreigners during this period was much increased compared to the corresponding period last year. Specifically, you record an increase of 523.5% (384.6% to Europeans and 975% to non-European buyers) with a total of 424 transactions. European buyers make up 59% with 252 transactions, and non-Europeans 41% with 172 trades.

Famagusta

During the period under review, the decrease in the volume of transactions in the province of Famagusta was of the order of -50.4% (greater decrease compared to all provinces) and the value at -19.1% compared to the corresponding last year. 2020 began with an increase in trading volume compared to the previous year of 30% and 15.7% for January and February. Nevertheless, the value of transactions in these months was slightly reduced to -1.35% and -21.47%, respectively. Once again, April recorded the largest annual decreases, with the volume decreasing by -87.3% and the value of transactions by -95.5%. The yearly increase recorded in the July-September quarter (45.4% on average) was only able to contain the period's overall decrease.

Regarding the interest of foreign buyers, the province of Famagusta presents, in percentage, a similar picture to that of the other coastal areas. Expressly, foreign buyers represent about 18%, with a total of 144 transactions with their interest showing an increase of 453.8% compared to the corresponding period last year. With 125 markets, European buyers make up 87% while non-Europeans the remaining 13% with 19 demands.

Source: inbusinessnews.reporter.com.cy
Photos: inbusinessnews.reporter.com.cy, pixabay.com
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