Overview of Cyprus Real Estate Market 2022
The year 2022 has been one of the most successful for the Cyprus property market in the past 14 years. Despite, or, perhaps, due to the unstable world economic and political situation, the market woke up from the post-covid lethargy and showed incredible sales volume numbers.
The total value of real estate sold last year reached a staggering €5.85 billion. This number includes all types of properties, residential, commercial, land, and buildings. If we want to have a look at the residential units only (apartments and houses), here we have almost €4 billion in sales.
Comparing this with the last year’s data, we see an impressive increase of 30% in year-on-year sales. Notably, it is also the best result since 2008! Pretty much all the areas of Cyprus showed the growth in total property sales since last year, with Pafos leading the way with a 58% increase in total sales and a staggering 79% in foreign sales.
Traditionally, the island attracts thousands of property investors from all over the world, which drive a healthy demand in addition to a stable local buying trend. Limassol and Pafos are the areas that attract the most foreign buyers, both from EU and non-EU countries, and last year has been no exception. In terms of property types, Pafos remains the leader in the villas and houses market, due to the region’s stunning location, views, climate, and atmosphere, while the cosmopolitan Limassol is the king of luxury apartments and high-rise seafront towers. Nicosia is a more humble yet more stable market, attracting students, business owners, and government workers.
So, what are the reasons for such dramatic growth, especially in foreign sales?
Firstly, the traditional market drivers are still in force and have been especially attractive in 2022. These are tax incentives, lifestyle opportunities, relocation, and a healthy ROI potential of Cyprus properties. The Permanent Residency through investment programme is also one of the strongest stimulae for the non-Europeans to buy. Through this “fast track” PR scheme, the investor and, most importantly, all his family, can get a European residency status valid for a lifetime, with the purchase of a new home worth minimum 300 000 euros + VAT.
Last year, however, we saw a number of other factors influencing the market. The most important, of course, was the military operation in Ukraine, with thousands of families fleeing the war and settling on the island, renting and buying properties, thus pushing the demand. The influx of relocating families from other countries also increased, following the pandemic years, which proved that you could work from home basically anywhere in the world. The Europeans have shown an increased interest in Cyprus, especially considering the sky-high energy prices and harsh weather, while the island lures with its mild sunny climate and reasonable cost of living. One more reason for the growth is the preferential conditions the Cyprus government provided for the relocating IT companies, including the recently added law allowing the IT nomads’ spouses to be employed in the republic. Finally, the dooming changes in VAT and property taxes spur some investors to speed up their decision-making and proceed with the purchase before the possible changes are introduced.
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