Following a significant pause last year due to the COVID-19 pandemic, Cyprus’ housing market is now showing signs of recovery. Currently, low-interest rates, as well as government relief measures are driving construction and property demand.
During the year to Q1 2021, the nationwide residential property price index rose by 0.91% (1.64% inflation-adjusted), according to the Central Bank of Cyprus.
By district, in 2021:
- In Nicosia, Cyprus’ capital, apartment prices rose by 2.2%, but house prices fell by 0.9%.
- In Limassol, apartment prices rose by 3.4%, and house prices increased by 2.7%.
- In Larnaca, apartment prices rose strongly by 6%, but house prices fell by 0.8%.
- In Paphos, both apartment and house prices fell by 3% and 1.6%, respectively.
- In Famagusta, apartment prices rose by 3.2%, while house prices dropped slightly by 0.1%.
Residential construction activity has quickly recovered. Within the first four months of 2021, the number of value of residential building permits rose by 44.6%. Dwellings authorized also increased almost 50% to 3,353 units in Jan-Apr 2021.
After a double-digit decline last year, demand is now rising again.
In the first six months of 2021, total property sales in Cyprus rose strongly by 36.2%, according to the Department of Lands & Surveys.
Over the same period, domestic property sales soared by 73%, while foreign property sales dropped by 8%.
Overall, Cyprus’ real estate market is has remained steady during the year. Activity and prices in the main commercial centres of Nicosia and Limassol are currently stable, as locals are acquiring residential properties taking advantage of various government subsidies and to generate income.
However, other districts are continuing to experience low levels of demand, as they are more reliant on overseas markets and have a higher dependency on tourism.
The Cyprus real estate market has historically been divided into the major city centers of Nicosia, Limassol and Larnaca (primarily driven by local demand); and the seaside resort areas of Paphos and Famagusta, which are driven mainly by foreign demand.
Foreigners can buy one home in Cyprus, and are entitled to hold land freehold, but there is a maximum limit on land ownership of 3 donums (4,014 sq. m.).
The International Monetary Fund (IMF) expects the Cypriot economy to grow by 3% this year, following a contraction of 5.1% last year. But the Finance Ministry is more optimistic, projecting growth of 4.5% to 5% this year.