According to PWC’s February 2022 annual report, 2021 saw strong signs of recovery. The Real Estate & Construction sector made up 16% of the country’s Gross Value Added (GVA) output in the year to 30 September 2021. Despite the pandemic and the suspension of the Cypriot Citizenship by Investment Program (CIP), the sector’s GVA output was up by 4% in the 12 months to 30 September 2021, maintaining it as one of the fastest-growing sectors of the economy.
Key Drivers for the Housing market in Cyprus included an increase in household disposable income by 0,5% in 2020, mainly attributed to the Government’s fiscal support measures. A further slight increase is expected for 2021 partly linked to a marginal forecasted increase in employment. Interest rates on housing loans continued to decline reaching 2,05% (9 bps drop compared to 2020), mainly attributed to the government interest subsidy measures.
2021 Cyprus saw a total of 19,100 property transactions, up by 32% and 11% from 2020 and 2019 respectively. Transactions values reached €3,8bn, up by 26% and 14% from 2020 and 2019 respectively, reflecting a shift towards lower price buckets, driven by a strong domestic sector.
Transaction values for residential property (which included properties purchased in relation to the Cypriot Residency by Investment program) reached €2,4bn, up 16% from 2020. 6,500 apartments and 4.100 houses were sold, an increase of 23%, reflecting a lower average transaction value compared to 2020. The residential property made up 65% of the total value of real estate transactions in 2021 (35% apartments and 30% houses), compared to a 71% contribution during 2020. Sale contracts recorded at the Department of Land and Surveys (DLS) reached 10.347 in 2021, 30% up from 2020, and sale contracts reached pre-pandemic levels, demonstrating the overall recovery of the market.
During 2021, foreigners acquired 3,691 properties (DLS records) 24% up from the 2,985 properties in 2020. From March 2021, transactions from foreigners followed an increasing trend showing confidence in the foreign market. From August 2021, monthly transactions from foreigners appear to consistently surpass 2019 levels. Non-EU buyers made up 50% of property acquisitions (2019: 66%, 2020: 61%).
Residential Property Prices
The Central Bank of Cyprus (CBC) index recorded an increase of 1% during 2020, and an increase of 1% year on year to Q3 2021, mainly driven by domestic demand (particularly for apartments). This was aided by subsidisation of interest rates on housing loans, Government support schemes relating to the labour market and the moratorium for deferral of loan instalments, and may also be linked to an increase in construction material costs
Please contact us if you have any questions or require further information relating to; the different Residency program options available or require a personal quotation sheet for individual or family applications.
The Overseas Investor can introduce you to our recommended Cypriot Lawyer who is a Licenced Local Agent for the Residency by Investment program for Cyprus. We are also here to assist each client throughout the whole legal process.