The Cyprus Government’s issuance of a 5-year international bond (€1 billion) in February 2021 had a reoffer yield of 0,053%, the lowest reoffer yield and coupon to date since Cyprus returned to international markets in 2014. The demand for these bonds reached €8,5bn at its peak, the largest order book Cyprus has achieved in a single-tranche syndicated transaction since returning to the capital markets in 2014.
In January 2022, the Cyprus Government issued a 10-year international bond (€1 billion) yielding 0,95%. A total of €7,8 billion was demanded this bond. Over €7,8bn of demand was received for January 2022, a 10-year government bond. Lending market % New mortgages increase by 43% during 2021.
In 2021, the government’s interest subsidy scheme, as well as improved economic recovery from Q2 2021 onwards, drove a significant increase in new mortgage loan facilities. Specifically, new mortgage loan facilities reached €1,3bn during 2021, exceeding pre-pandemic levels (2019: €972mln) GVA Contribution. The Real Estate & Construction sector’s contribution to GVA output increased by 4% (12M period to 30 September 2021).
Over the past 12 months, the Real Estate & Construction sector contributed 16% of the country’s GVA. During this period, despite the disruption caused by the pandemic and the termination of the Cyprus Investment Program (CIP), the sector’s GVA output increased by 4%, making it one of the fastest growing sectors of the economy, which demonstrates its resilience and importance. The Real Estate & Construction sector contributed 16% to the country’s GVA during the 12-month period to 30 September 2021.
Despite the disruption caused by the pandemic and the termination of the Cyprus Investment Program (CIP), as of 1 November 2020, the sector’s GVA output increased by 4% during this period, maintaining it as one of the fastest growing sectors of the economy, highlighting its resilience and importance to the overall economy.
In the face of domestic demand driving price growth, foreign investors’ demand and rising construction costs are also contributing to the growth. In addition to tax incentives, the Government is offering incentives to encourage the relocation of businesses to Cyprus, increasing the demand for luxury homes for rent and for purchase.