Cyprus, August 10, 2023 – Cyprus Sotheby’s International Realty has published its quarterly report “INSIGHTS” on the Cyprus Residential Real Estate market in the first half of 2023 based on data from the Cyprus Land Registry.
Anastasia Yianni, CEO of Cyprus Sotheby’s International Realty, commented: “Cyprus’ high-end residential property market continues to demonstrate strong results. The first half of 2023 showed an increase on the market both by volume and value comparing with the same period of the last year. The number of transactions grew in the high-end houses and apartments segments. Though there was a minor 1.9% decrease in the high-end apartment segment by value, it was offset by the results of the high-end houses segment.
We have seen a stable demand for high-end residential property, both for houses and apartments, in all districts across Cyprus, from both domestic and international buyers. We have a moderate outlook for the high-end property market and expect a slightly negative trend in the short and medium term on the back of the extremely strong previous 2022 year and the latest legislative initiatives.
Whilst recent legislative changes may have led to some uncertainty in the market, the traditional Cyprus market drivers such as lifestyle opportunities, the residency program and the healthy ROI potential of Cyprus properties are in force, and will support the market in the long-term”.
The key report takeaways
- The total number of property transactions in Cyprus is growing, indicating the overall growing demand for real estate on the island from domestic and foreign buyers. According to the Cyprus Land Registry, as of the end of June 2023, the number of sales contracts reached 7,689, compared to 6,263 this time last year.
- Cyprus is attractive for foreign buyers. The share of sales to foreign buyers increased - with 46.5% of total property sales attributed to overseas buyers, resulting in a 36.1% year-on-year increase. Foreign sales were mainly attributed to Limassol and Paphos, with 36% and 35% of sales attributed to foreign buyers respectively. Domestic sales also grew in the first half of 2023, with a 13.1% year-on-year increase.
- In the first half of 2023, the property sales to non-EU citizens almost doubled when compared to this time last year with a total of 2,608 transactions.
- According to Cyprus Sotheby’s International Realty survey, the top EU countries buying property in Cyprus were Germany, Austria, Poland and Greece. Looking at non-EU buyers, Cyprus was popular amongst British, Israeli, Russian and Ukraine buyers. The Permanent Residency through investment program is the key driver of demand from Russians and other non-EU citizens, while UK and EU buyers choose Cyprus for the lifestyle on offer, including the year-round sunny climate and the attractive cost of living.
- The high-end property market in Cyprus also saw impressive growth in H1 2023, with transactions totaling 1,757. This sector accounted for 27% of the total number of transactions - demonstrating an increase by 12.6% year-on-year. In terms of value the Cyprus residential real estate market reached EUR 1.7bn in total sales in H1 2023. High-end properties accounted for a half of the total market by transaction value (54.3%) with EUR 936.2mn - demonstrating an increase by 0.7% year-on-year.
- In H1 2023, the high-end houses segment grew both by value and by volume in comparison to H1 2022. The number of transactions with high-end houses grew by 22% year-on-year to 338 and sales numbers increased by 6.3% year-on-year to EUR 314.4mn.
- In H1 2023, the high-end apartments segment grew in volume by 10.5% year-on-year to 1,419 transactions, but declined in value by 1.9% year-on-year to EUR 621.8mn.
- In Limassol, in H1 2023, the high-end market increased in volume by 5.5% year-on-year to 943 transactions while declining in value by 5.5% year-on-year to EUR 558.4mn. The decline was attributable to the high-end apartment segment, which decreased by EUR 51mn or 10.9% year-on-year. The cosmopolitan Limassol is the king of luxury apartments and high-rise seafront towers. Meanwhile, the segment of the high-end house in Limassol grew by 15.2% year-on-year to EUR 142mn in value and by 38% year-on-year in volume.
- In Paphos, in H2 2023, the high-end market grew by 14.5% year-on-year by value to EUR 178.2mn and by 36,4% year-on-year by volume to 311 transactions. The growth was mostly driven by the high-end apartments segment which increased by 38.3% year-on-year to EUR 62.9mn.
- In Nicosia, in H1 2023, the high-end market was basically stable showing a minor increase both by volume and value. The strong performance in the high-end apartments segment offset the decline in the high-end houses segment.
The legislative initiatives
- On May 2, 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.
- On June 8, 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.
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The numbers for Q1 2023 in the report are adjusted based on the data from the Cyprus Land Registry.
The high-end property market in the report means houses over EUR 500k and apartments over EUR 200k.
About Cyprus Sotheby’s International Realty
Cyprus Sotheby’s International Realty is a luxury real estate agency in Cyprus headed by CEO Anastasia Yianni. The agency provides the full scope of services related to properties for life and investments. The agency has been successfully operating in Cyprus since 2019 and currently has two offices on the island - in Paphos and Limassol. In 2023, Cyprus Sotheby’s International Realty was awarded as the Best single real estate agency in Cyprus by European Property Award.
Cyprus Sotheby’s International Realty is part of the largest affiliate Sotheby’s International Realty network of more than 1,000 offices in 81 countries. Working with Cyprus Sotheby’s International Realty clients get access to the exclusive base of elite properties worldwide. As a member of the world’s famous brand Sotheby’s auction house with 300-year history defines performance of exception quality of work and the culture of customers bespoke services.