13 November 2023
The real estate market in Cyprus has shown remarkable resilience in 2023, demonstrating an impressive sales velocity, particularly among foreign buyers.
This trend marks 2023 as potentially the best year for the sector since the global property crisis in 2008.
According to Land Registry figures, the first 10 months of 2023 have been the best on record since 2008, with sales documents filed reaching 12,825, a 36.2% increase from the previous year.
This surge reflects the robustness of the market despite economic uncertainties stemming from the energy crisis, interest rate hikes, and ongoing conflict in the Middle East.
Limassol leads in absolute sales numbers, with 4,225 properties, notably outpacing Paphos, which recorded 2,878 sales. Larnaca has shown significant growth, with sales rising to 2,612 from 1,976 in the previous year. This marked increase in Larnaca's sales, a 32% jump from last year, is attributed to various development and infrastructure projects in the area.
Price Trends and Market Dynamics
The market's dynamics are also shaped by the limited supply of higher-end real estate, especially in Larnaca, which has become increasingly popular with Israeli buyers. This demand is expected to spur housing project construction in the near future.
Nicosia, while experiencing a temporary slump, has seen a revival in market activity, partly due to the overflow of interest from Limassol, where property prices have reached record highs. Additionally, Nicosia benefits from the relocation of Ukrainian refugees initially settled in Limassol.
The market's stability in the coming year hinges on various factors, including potential changes in foreclosure laws. If banks are allowed to foreclose primary residences, this could increase the property pool, potentially boosting sales further.
Real Estate Prices by District
Nicosia, with the lowest average house price of €180,000, contrasts with Limassol, where the average sale value stands at €326,000.
Famagusta recorded the highest year-on-year increase in average sales price, a significant 52.4% jump to €272,000.
The Role of Foreign Investment
The influx of foreign capital has been pivotal to the sector's growth, with a marked increase in demand for luxury homes and Grade A offices. This trend underscores Cyprus's position as a rapidly growing investment center in Europe, buoyed by political stability and an attractive legal framework.
Sustainable Growth and Square One's Role
While the real estate sector in Cyprus rides a wave of robust growth and high sales velocity, balancing foreign investment with local needs remains crucial. This balance is essential for ensuring sustainable and long-term growth, particularly in the face of rising inflation affecting the broader economy.
In summary, the Cyprus real estate market in 2023 showcases a strong sales velocity, driven by foreign investment and regional development, promising a continued upward trajectory despite economic headwinds. The involvement of companies like Square One, with their rapidly expanding portfolio, further enhances the attractiveness of this market as a lucrative investment opportunity.