Inexpensive property in Cyprus: the pros and cons of a home abroad

Недорогая недвижимость на Кипре: плюсы и минусы зарубежного жилья
30 December 2020 DOM LiVE
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Cyprus budget property is of interest to buyers of two categories. The first one is those people who are going to live in their overseas home. The second category is citizens and non-residents of the country who want to make a profitable investment. A profitable investment is to rent out housing, or to turn a large amount of money into real estate, so that "the money is saved"

As a rule, inexpensive apartments and houses in Cyprus are not bought in order to resell at a higher price as this type of investment is typical only for the elite real estate sector. The budget housing is usually of interest to foreign buyers as a source of rent.

1. How much "inexpensive real estate" costs

The concepts of "inexpensive, cheap, profitable" are always ambiguous. To concretize them, you need to clarify the following points:

  • real estate location
  • status: primary or secondary
  • price per square meter
  • number of bedrooms
  • condition utility lines, furniture, technology.

As a rule, inexpensive real estate is a small amount of square meters (1 bedroom for an apartment or 2-3 bedrooms for a house) and this real estate is neither seafront nor in the fashionable area of the city. Most often, budget housing is also secondary real estate, although sometimes there are cheap new buildings in Cyprus.

The range of Cyprus real estate prices for apartments and houses is colossal. And the easiest way to concretize this with examples:

The most expensive real estate in Cyprus (by the cost per 1 m2) is located in Limassol. So, an apartment in a Limassol district village (15-20 km from the city) costs at least €50-60,000. It will be either a studio or a small one-bedroom apartment with an area of  40-50 m2.

The average cost of a one-bedroom apartment or a big studio is €110,000. For this price you can buy housing in Limassol city or in the nearest suburbs. The area will be 35-45 m2.

Small houses in Limassol district with 1-2 bedrooms can cost €150,000, but they are located in a distant suburb or village. For this price, the buyer will receive approximately 70-100 m2

The average price of houses in a developed suburb (Germasogeia, Ayios Tychonas - this is not too far from the sea) is € 200,000. There are 2-3 bedrooms, or 120 - 170 m2.

Total: the average price of one square meter of an apartment in the budget real estate sector in Limassol is €2,500. Houses have a lower average price tag per square - about €1,700.

Real estate in Paphos costs much less. For example, an apartment in Peyia or any other suburb can be purchased for €50-60,000. At the same time, it is quite spacious - 50-60 m2.

The closer to the city center, the price is bigger. But increasing is not so big: an apartment with 1 or 2 bedrooms is cost € 80,000 on average. For this amount, the buyer gets from 60 to 100 m2.

Village houses cost at least € 54,000. For this price, they offer housing with 1-2 bedrooms and 70-100 m2. Houses in the nearest suburbs (Chloraka, Geroskipou) or further away, but in developed settlements (Peyia, Polis) and more spacious are more expensive: about €100-120,000 for 2-3 bedrooms and an area of  90-110 m2.

Total: in Paphos, one square meter in an apartment costs on average € 1000 (which is significantly less than in Limassol). The price of houses is slightly higher: about € 1200 per 1m2.

Real estate prices in Nicosia, especially in the city center, are almost similar to Limassolian ones. But housing in the capital is in demand mostly by those who are going to move in. It is not very suitable for renting out, as Nicosia is not the most tourist area.

Larnaca is one of the cheapest cities in Cyprus. Real estate here costs 15-20% less than in Limassol. But you can rent it strictly during the high season (from May to October), Larnaca housing is generally not in demand for daily rent in winter.

The same situation is in the Famagusta area (Ayia Napa, Protaras, and the villages nearby). Income from the tourism sector can be received only for six months. The rest of the time the housing is vacant, so the owners live in it, or rent it out for a long time, but this is far from being as profitable as for short-time renting out.

You should never forget that there are hot offers for real estate all over Cyprus. This is an urgent sale, bank auctions, etc. Therefore, a spacious house right on the seashore can also receive the title of "inexpensive real estate". The main thing is to clearly understand what budget the buyer has and what he expects to get for this money.

*All prices are given as an example and are taken from the database of dom.com.cy.

2. Pros inexpensive real estate in Cyprus

Undoubtedly, buying a budget housing is an opportunity to invest a small amount of money. Because property in Cyprus will not get cheaper in the next at least 10 years (analysts say so). In addition, there are other pluses.

2.1. Obtaining a residence permit

When buying a Cyprus property, a non EU citizen can apply for a Cypriot residence permit, not only for themselves, but also for their family members.

In addition, it is not at all necessary to choose this particular type of residence permit, as there are others. The reason for residence can be study, work, family ties with EU citizens. But if you have your own real estate in Cyprus, you have a better chance to get a residence permit without any problems.

Finally, for receiving permanent residence and naturalization, you must permanently live on the island. It is much easier to live in your home.

2.2. Rental income

It has already been said that inexpensive real estate is small and located not in the very center of the city. This means that the cost of renting out is not high as well. But, in turn, it attracts more people who want to rent housing.

For example, the "working" area of Limassol Neapolis does not have a large number of luxury real estate. But there are enough apartment buildings, which means that families, who work in the city, and thrifty tourists pay attention to this particular option.

Moreover, housing can be rented both for short-term and long-term. In big cities there are always tenants. In non-tourist areas, long-term rentals are, of course, more profitable. Thus, the owner of the apartment receives a permanent stable income.

2.3. Investing in real estate

It has already been mentioned that you can find housing at a very low price in a good area and with a large living space. Often such real estate requires additional investments, but if everything is calculated correctly, in a few years it can be sold very, very profitably.

In addition, you can invest in new buildings that are under construction, such apartments cost 10-20% less than Cyprus houses which are ready to move in. 

2.4. Low maintenance costs

The higher the 'class' of housing, the more costs it requires. This also needs to be taken into account when choosing between "economy", "business class" and luxury real estate. Inexpensive housing is unlikely to require a designer renovation, hiring staff and large spending on utilities.

For example, utility bills for a one-bedroom apartment or studio in an ordinary house are €300-500 per year (excluding water and electricity). You also need about € 300-500 to make some renovation if the apartment is rented out for short-term rent. For long-term rentals or if you want to move in, this expense item can be excluded.

Apartments in a residential complex with additional services (parking, swimming pool, closed adjacent territory, gym, etc.) will require large costs: about €1500-2000 per year (excluding water and electricity). Renovation of high class housing is also 2-3 times more expensive.

2.5. Perfect weather and nature

Finally, inexpensive accommodation in Cyprus is suitable for those who want to spend most of their time on a warm island closer to the sea. Fruits and vegetables grow and the sun shines here all year round.

It is very cool to raise children in Cyprus: there is no harmful pollution, seasonal viruses are only in the middle of winter, there are excellent schools and kids events in the cities. After schools kids can study in universities in Cyprus.

3. Cons of inexpensive real estate in Cyprus

Of course, an inexpensive home has disadvantages. They do not scare off potential buyers, but you just need to be prepared for them in advance.

3.1. Renovation, new furniture and time

Apartments in need of renovation are always cheaper than similar options in good conditions. Therefore, when buying, you need to understand: if the cheap apartments really are profitable, or the renovation takes a lot of money?

The house is a similar problem, plus some buildings require major repairs or new utility lines. If so, you have to invest much more money in the property. And you have to do everything yourself. To foreigners these renovations may seem too complicated as it's an another country, there are different rules, a different language.

Finally, the housing that is planned to be rented out must have furniture and appliances. This is also a considerable amount of money plus more troubles. Sometimes it is really easier and cheaper to buy real estate where the tenants or you can move in right after the purchase.

3.2. Disadvantages of primary and secondary real estate

Secondary housing in 95% of cases requires at least cosmetic repairs. And if there was a redevelopment in the housing, or an additional building was erected on the plot, there may be legal problems.

There are also difficulties with primary real estate, especially if you bought an apartment in a building which is still under construction. For example, in winter, strong winds can 'walk around' the apartment, and you cannot survive without a heater.

Another nuisance is the lack of normal ventilation and high humidity, which can persist even in summer. Also, the real estate "from the picture" may not look like the real home after the final construction. Of course, there are no such problems in elite apartment buildings and villas, but they still may happen to budget complexes.

3.3. The need to look after your housing and invest in it

It was said above that a house or apartment would still require repairs and maintenance costs. And the buyer's task is to calculate the approximate cost of maintaining the home per year.

For example, you managed to save some money and buy a good, but cold house for €80,000, while similar options cost € 90,000. It cost €500 per month to heat it for 4 cold months, a total of € 2,000 per year. That is, in just five years, your home will become more expensive than a similar option.

All questions about breakdowns, utility bills and other problems have to be solved yourself, especially if it is a private house. Therefore, a foreign owner of Cypriot housing has to understand the specifics of local services and look for different specialists whom they can negotiate in a familiar (or native) language.

Of course, the owners who permanently live in the purchased housing still have to solve all these problems. But those who want to buy real estate exclusively for earning money should think twice about all the difficulties and expenses: isn't it easier to overpay once and then make a profit without any problems?

Looking for accommodation in Paphos or Limassol - apartment, house, villa for rent or property? Contact the DOM real estate agency in Cyprus. The company's specialists will help you find the perfect home for free. Follow the link.

Read more:

  • Features of seafront real estate in Cyprus (link)
  • Where to buy property in Limassol to rent out? (link)
  • Limassol city overview: a place to live, relax and invest (link)
  • Pissouri. A place in Cyprus where you want to live (link)
Source: DOM LiVE
Photos: pixabay.com, free images.google, dom.com.cy
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