After falling sharply in 2020 during the pandemic, demand for premium real estate regained momentum last year. This was especially evident in the case of Nicosia, where sales of luxury houses and apartments are on the rise.
Several traditional demand factors continue to drive the market, including tax incentives, lifestyle opportunities, relocation and a healthy ROI potential.
1. Tax incentives
Investing in the Cyprus property market can provide a number of tax incentives, depending on your individual circumstances and the type of investment you are making. These include exemptions for the acquisition and rental of real estate, as well as reduced rates for capital gains tax, income tax and stamp duty. You should consult with a professional before purchasing property to understand your tax situation and the potential benefits.
The Cyprus property market is a popular destination for high-net worth individuals (HNWIs) and investors looking to relocate or retire abroad. The country’s favourable taxation laws and stable economy make it an attractive investment option. In addition, the government has implemented a number of measures to encourage property investment.
While raw material and construction costs are rising across Europe, Cyprus’s property prices have remained relatively stable. This is due to an increase in demand from locals and foreigners alike, who are drawn to the island’s climate, lifestyle and culture.
In 2022, a majority of property transactions were conducted in properties with price points between EUR100,000 and EUR300,000, indicating strong interest in the middle of the market. This trend was particularly apparent in Nicosia, with a 5% yearly uptake in property sales in this price range.
The halt of the Citizenship by Investment Program in late 2020 was an impactful factor, but it also forced developers and investors to shift focus toward more affordable property options. The result is a more diverse range of housing types, with an increasing number of communities catering to different budgets and lifestyles. 江東区 不動産売却
The top EU countries purchasing property in Cyprus in 2022 were Germany, Austria, Poland and Greece, while non-EU buyers included Russians and Ukraine nationals seeking to take advantage of the Golden Visa (residency) program. This trend is expected to continue in 2023, with the majority of purchases involving luxury apartments in Nicosia.
2. Lifestyle
If you are looking for a place to live or work abroad, Cyprus offers a variety of lifestyle options. This small Mediterranean country is a popular vacation spot for visitors from around the world, and it also offers residents a chance to live in an exotic location at a reasonable price. You can choose to purchase a house, apartment, dacha, or even a land plot. However, it is important to research the property market in Cyprus carefully before making a decision.
Real estate is an important asset for many people, and it can also be a great investment. It is important to understand the difference between leasing and selling real estate, and it is also helpful to have a clear understanding of the property market in Cyprus. This will help you avoid mistakes and make a good decision.
In addition to residential properties, the Cyprus property market has a strong focus on commercial properties. Commercial properties include hotels, restaurants, and office space. These buildings are in high demand and offer a variety of lifestyle options for residents and visitors alike. You can buy a commercial property in Cyprus for many reasons, including its convenient location and favorable tax rates.
The Cyprus real estate market has experienced an increase in demand over the past year. This is largely due to the fact that the island's economy has improved and foreign investors have renewed interest in the property market. This has led to an increase in the value of residential properties.
The Cypriot real estate market is growing, and it is expected to continue to grow in the future. The country is a popular destination for Europeans and non-Europeans, especially Russians, Israelis, and Ukrainians. The country is known for its warm climate and low cost of living, which makes it an excellent place to live or retire.
3. Relocation
Cyprus has always been an attractive option for people relocating from other parts of Europe to live. This is partly due to the fact that it has a mild sunny climate and a reasonable cost of living, but it also attracts families looking for a safe place to raise their children. This has pushed up the demand for both new and second-hand properties in areas such as Famagusta, Paphos, and Nicosia.
Relocation trends are also driving investment in sustainable and energy-efficient properties, which appeal to environmentally conscious tenants. Additionally, the property market in Cyprus is increasingly being digitalized to simplify processes and improve convenience for both buyers and sellers. For example, new online platforms for property listings and rental payments are being developed to make the process more convenient and secure.
Before the Covid-19 pandemic hit, the market had been growing rapidly thanks to strong buyer interest and the island’s tax incentives. Foreigners in particular were drawn to the country’s Permanent Residency through investment programme, which offers a fast-track route to EU citizenship for them and their family.
After the pandemic, however, many people are hesitant to purchase a property without viewing it first. We expect this to push up the demand for both new and second-hand homes in North Cyprus, particularly in Kyrenia and its closer surrounds such as Karaoglanoglu, Lapta, Alsancak, and Ozankoy.
The middle of the property market – those priced between EUR100,000 and EUR300,000 – saw the highest uptake last year, with a 5% increase in enquiries and transactions. This sector has been boosted by both EU and non-EU buyers, with the latter often focusing on Famagusta and Paphos due to their proximity to the mainland.
4. Return on investment
Property prices in Cyprus have been rising steadily for years, which makes the island a lucrative option for anyone looking to invest in real estate. In addition, the country offers several incentives for non-Europeans to buy property in the form of the Citizenship by Investment programme and the Permanent Residency through investment scheme. These schemes are among the strongest market drivers attracting foreign buyers, especially for residential properties.
The return on investment (ROI) you can expect from the Cyprus property market depends largely on where you choose to buy and what type of property you purchase. Generally speaking, apartments offer higher gross rental yields than houses. Rental yields are also higher in larger cities like Limassol and Nicosia.
According to RICS, apartment rents in Cyprus rose by 2% in 2021 from the previous year. House rents grew by 0.4% during the same period. Gross rental yields on residential property in Cyprus range from around 6% for apartments to 4% for houses, depending on location and quality.
If you’re planning to invest in a property in Cyprus, it’s important to work with a licensed and reputable real estate agent. This will ensure that you’re getting a fair deal and avoid paying for overpriced property.
With the right research and the right real estate agent, you can find a property that suits your needs and budget. It’s also important to consider the future growth potential of the property you’re considering purchasing, as this will impact your long-term return on investment. By taking the time to find a good property, you can be sure that your investment will pay off in the long run.
5. Security
Real estate in Cyprus comes with a number of security options. These vary depending on the type of property and its location. For example, homes located in the country’s most popular residential areas are often equipped with advanced smart home technologies. These features offer a number of benefits, such as fine-tuned temperature control and remote security. Smart homes also have the potential to make home ownership more efficient by reducing energy usage.
A number of traditional market drivers continue to boost the attractiveness of Cyprus’ property market. These include tax incentives, lifestyle opportunities, relocation, and a healthy ROI potential. In addition, the country’s Permanent Residency through investment program continues to appeal to foreign HNWIs, investors, and retirees. This is a great way to gain full European citizenship and enjoy tax advantages in the process.
While the overall property transfer value in Cyprus has been growing steadily, some areas have performed better than others. The strongest growth has been seen in Nicosia and Larnaca, while Paphos and Famagusta have experienced more moderate growth rates. Overall, the average price for a residential property in Cyprus is significantly lower than that of most countries in Europe.
The Cyprus property market has been resilient to recent challenges, including the discontinuation of the Golden Passport (citizenship) programme and Covid disruptions. In fact, the number of new developments has risen by 17% year-on-year in 2021. The shift in market demand has led developers to focus on delivering more affordable apartments for local and international buyers. In the long run, this will be beneficial to the market as a whole. In addition to offering greater affordability, these developments are more likely to attract younger Cypriots who are looking for an investment opportunity closer to home.
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