A dip in luxury property sales in Cyprus
🔍 Relying on the latest data published by the Cyprus Land Development Market, Constantinos Constantinou has prepared an expert analysis on how Cyprus property market is operating at a time of significant challenges that all countries’ economic systems are facing.
🔹️ The data reviewed contains information on industry bargains made in 2020, that were undeniably affected by the pandemic outburst, leading to significantly reduced levels of property transactions in the beginning of 2020 and then coming back to a slight growth by 2021.
🔹️ According to the statistics, the gross value of last year’s transactions was estimated as €3 billion, a 32% decrease compared to the year before. This decline as we have already discussed was mostly a significant reduction in deals with foreign buyers, who weren’t allowed to get to the country and doubted whether buying a property was an option at that time.
▪️ As the effects of the first May lockdown were wearing off, increased levels of sales were observed, mainly driven by domestic demand.
🔹️ All provinces in Cyprus showed quite major declines in property sales in 2020. The coastal provinces of Limassol and Paphos, where demand is mainly dependent on international transactions, experienced a huge dip in terms of sold properties cost (down by 36% and 47%) on an annual basis. ▪️Nicosia, however, where the demand is most reliant on citizens themselves was down only by 12%.
🔹 ️Based on the analysis, it appears that luxury real estate was perhaps the sector most affected in 2020, with 176 residential property transactions valued at over €1.5 million, down 45% compared to 2019.
▪️ It is also interesting to note that one of the most resilient property sectors seems to be residential units worth €100,000 — €300,000, as after the first lockdown was lifted in May 2020, there was an increase in demand.
▪️ This is mainly due to strong demand for residential properties, as well as an increase in demand for rental properties and buy-to-let transactions.
🔹️ As regards the construction sector, the number of new building permits recorded a marginal annual decline of 3%, but the decline in permit value amounted to 27%, indicating that new projects were on average smaller in scale. In particular, the number and value of new building permits increased by 23% and 44% respectively in the second half of 2020 compared to the first half of the year.
🔹️ The challenges caused by the pandemia make it imperative to reform the real estate sector, set new priorities and develop new strategies for the future.
🔍 Whereas all these changes are only yet to come around, you can learn about Cyprus real estate market on our platform. Link in bio!
