Experts positively assess the results of the past year for the residential real estate market in Cyprus. Statistics show that since 2014 the market has been actively recovering every year. In 2016, real estate sales grew by 43% (this was the largest increase since 2013), in 2017 the growth was another 24%. So far, all data for the past year have not been received, but experts believe that the growth figure will be in approximately the same range.
The main stimuli for the growth of the real estate market is the improvement in almost all sectors of the economy, which affected the purchasing power of the population and an increase in the general level of confidence within the country. Experts note that government support plays an important role in economic growth, which was expressed in the abolition of real estate tax, work towards facilitating the naturalization of investors and facilitating the process of obtaining permanent residence.
In the first six months, the number of issued building permits increased by 8%. At the same time, the total cost of objects increased by 20%. The largest number of certificates for the construction of new facilities was noted in Limassol (an increase of 25%). Interestingly, the largest increase in the value of new objects was recorded in Famagusta (an increase of 86%). An increase in the purchasing activity of foreign investors was noted. They purchased 103% more housing compared to Q1-3 2017.
The drop in real estate sales, which was observed in December 2018 compared to December 2017, is primarily attributed by experts to the fact that in 2017 during this period it became known about the introduction of the VAT rate of 19%, which led to a surge in the activity of investors who were in a hurry close deals before the end of the year so as not to pay the new tax. However, the December drop is the first in 19 months of sales. At the same time, foreign investors continued to actively conclude new deals. Almost 39% of transactions were made by residents of the European Union. In terms of popularity among foreign investors, the cities of Cyprus are located in the following sequence: Paphos, Limassol, Larnaca, Nicosia and Famagusta.