Cyprus Sotheby’s International Realty publishes a quarterly report “INSIGHTS” detailing the volume and value on Cyprus high-end residential real estate market for the full year 2023 and Q4 2023. This report also provides insights into the high-end real estate market in each district of the country.
Anastasia Yianni, CEO of Cyprus Sotheby’s International Realty, commented on the report:
“Cyprus’ high-end residential property market continues to demonstrate solid results. In 2023, it reached EUR 2bn, showing a 9.3% decline compared with the last year. The year 2022 was one of the most successful for the Cyprus property market in the past decade with impressive sales volume numbers as the post-covid lethargy had ended. It was no surprise that after such an incredible growth we saw the market stabilizing.”
The total value of real estate sold in 2023 reached €4,4 billion. This number includes all types of properties, residential, commercial, land, and buildings. The residential units only (apartments and houses) totaled €3.8 billion in sales, a decrease of 8% in year-on-year sales. While in Nicosia and Pafos we saw a stable market results, in Limassol the market declined last year.
The real estate sector is also impacted by the legislative initiatives. In 2023, we saw the adjusted regulations for permanent residency by investment in Cyprus, a new law on reduced VAT for first homes and a new citizenship framework for highly skilled professionals.
We have a moderate outlook for the high-end property market for 2024 and expect a stable demand for residential property from both local and international buyers supported by traditional Cyprus market drivers such as attractive lifestyle and business opportunities with sunny climate, safety, reasonable cost of living, favorable tax systems, the island’s prospects as an international business center and one of the top investment destinations in Europe.
For Cyprus Sotheby’s International Realty, 2023 was an active and successful year. We opened our second office in Limassol, received European Property Award as the best real estate agency in Cyprus, celebrated our four-year anniversary, participated at the Best Invest Congress and organized Business Talk to discuss life and investment opportunities in the period of uncertainty with international experts. We had 22 webinars for potential property buyers cementing our status as the team of professionals and real estate advisors offering an excellent service.”
THE KEY HIGHLIGHTS OF THE REPORT:
- According to the Cyprus Land Registry, as of the end of December 2023, the total number of registered property sales since the beginning of the year reached 15,567 showing a 16% increase year-on-year. In Q4 2023, the number of registered contracts of sales reached a total of 4,048, up 6,6% year-on-year.
- The attractiveness of Cyprus real estate market among foreign buyers continues to grow. The share of overseas sales composed 44.3% of total property sales contracts for the full year of 2023. Since the beginning of the year foreign property sales totaled 6,900, demonstrating an increase of 16% year-on-year driven by demand from non-EU citizens. The total number of property sales to non-EU citizens almost doubled (+46%) compared with 2022. In Q4 2023, the overseas sales decreased by 10.2% to 1,611 comparing with Q4 2022.
- As of the end of December 2023, the number of residential property sales totaled 14,566 showing a 4.8% decrease year-on-year. In Q4 2023, the number of residential sales contracts of sales reached a total of 2,758, down 33.4% year-on-year.
- Cyprus residential real estate market decreased to EUR 3.8bn during 2023, recording a 8% annual drop. The residential market actively grew throughout 2022 and first-half 2023, so the current correction was expected.
- In 2023, the number of transactions on Cyprus high-end residential property market totaled 3,849 representing an increase 3.7% year-on-year. By value, the high-end residential property market declined by 9.3% year-on-year to EUR 2bn. The high-end properties account for almost a half of the residential market (46.8%) in terms of transaction value. The decline in value was mainly attributed to the results of the last quarter. The high-end residential property market was not very active in the last three months. The number of transactions totaled 637 with only 112 transactions with high-end houses. By value, in the last quarter, the high-end residential property market dropped by half (-52%) year-on-year and reached EUR 328.6mn mark.
- In 2023, both segments – houses and apartments - showed a decrease year-on-year both by volume (8.6% and 2.7% respectively) and by value (8.8% and 7.4%).
- Meanwhile, the high-end apartments segment grew by volume by 2.7% year-on-year to 3,172 transactions and high-end houses segment increased by volume by 8.5% year-on-year to 677 transactions. However, by value, the high-end apartments and houses segment declined by 7.2% and 10.3% respectively year-on-year.
- In Limassol, since the beginning of the year the number or registered transactions with high-end property reached 2,051, representing a decrease by 5.7% year-on-year. By value it declined by 17.4% year-on-year. In Q4 2023, the local high-end market decreased by half year-on-year in terms of volume to 322 transactions and almost by 59.7% year-on-year in terms of value to EUR 180.5mn.
- In Paphos, in 2023, the number of transactions in high-end market reached 662, up 17% year-on-year while the value of the market grew slightly by 1.3% year-on-year to EUR 382.5 mn. In Q4 2023, the local high-end market dropped by half year-on-year both by volume to 87 transactions and by value to EUR 57.7mn.
- In Nicosia, in 2023 the high-end local market was basically stable comparing with the last year, showing a minor increase both by volume and value.
THE KEY LEGISLATIVE INITIATIVES IN 2023
- In May, 2023, the regulations for permanent residency by investment in Cyprus changed. According to new criteria, to apply for permanent residence in Cyprus, a person is required to invest in a property valued at a minimum of EUR 300,000 + VAT, by transferring the funds to the developer's account immediately, regardless of the date of delivery of the property. The funds must originate from the investor's personal account or his/her spouse. The main applicant must show proof of annual income of at least EUR 50,000 (EUR 30,000 before), validated by a tax return from the country of tax residence. The Permanent Residency by investment programme is one of the strongest stimulae for the non-Europeans to buy property in Cyprus.
- In June, 2023, Cyprus Parliament passed a law on reduced VAT for first homes. This change was prompted by EU scrutiny for misleading VAT issues in the past. The VAT incentives are important for many international buyers as reduced VAT will keep their interest in properties under construction. There is no distinguish between apartments and houses. All luxury properties in Cyprus will be excluded from VAT incentives. This could reduce demand for luxury properties and put strain on many projects. These changes could reduce demand for new properties in general and as a result the construction sector can be negatively affected. However, for properties with granted building permits or submitted applications for them, the old incentive still applies which stimulated the immediate demand.
- In November, 2023, The Parliament of Cyprus adopted a new citizenship framework for highly skilled professionals. Through the adopted law, the foreigners who possess highly specialised knowledge and qualifications can obtain a citizenship of the Republic by virtue of naturalisation in four or five years depending on the level of the Greek language.
The high-end property market in the report means houses over EUR 500k and apartments over EUR 200k.
For more insights read our quarterly INSIGHTS magazine with the latest residential property stats.