Confidence is returning to Cyprus’ housing market

Confidence is returning to Cyprus’ housing market

There have been eight long years of house price falls. Now Cyprus’ housing market is gaining momentum, with both sales transactions and construction activity rising strongly.
During the year to Q1 2019, the nationwide residential property price index rose by 4.3% (2.9% inflation-adjusted), its tenth consecutive quarter of y-o-y growth, according to the Cyprus Statistical Service (CYSTAT). In fact, it was the biggest annual rise since Q2 2008.
On a quarterly basis, residential property prices increased 0.8% (0.9% inflation-adjusted) in Q1 2019.

By district, during 2018:
In Nicosia, Cyprus’ capital, apartment prices rose by 1.2%, and house prices increased by 0.5% from a year earlier.
In Limassol, apartment prices rose by 8.6%, while house prices increased by 1.6%.
In Larnaca, apartment and house prices rose by 2.7% and 1.1%, respectively.
In Paphos, apartment prices rose by a robust 5.3%, while house prices fell 2%.
In Famagusta, apartment and house prices rose by 4.9% and 4.4%, respectively.

During the first half of 2019, property sales in Cyprus rose by 24.4% to 5,560 units from a year earlier, following annual rises of 5.8% in 2018, 23.7% in 2017, 42.6% in 2016, 9.4% in 2015 and 20.2% in 2014, based on figures from the Department of Lands & Surveys.
Likewise, the number of dwelling permits soared 38.4% y-o-y to 2,481 units during the first four months of 2019, according to the Statistical Service of Cyprus.

This across-the-board housing market improvement is partly driven by Cyprus’ robust economic growth over the past three years. In 2018, the economy expanded by 3.9%, following growth rates of 4.8% in 2016 and 4.5% in 2017, according to the Statistical Service of Cyprus. However, economic growth is projected to slow to 2.9% this year and to 2.6% in 2020, amidst slowing tourism and escalating trade tensions globally, according to the European Commission.
Despite this, the housing market is expected to continue to improve in the coming months, thanks to strong demand and improvements in the banking system.

The Cyprus real estate market has historically been divided into the major urban centres of Nicosia, Limassol and Larnaca (primarily driven by local demand); and the seaside resort areas of Paphos and Famagusta, which are mostly driven by foreign demand. The economic decline of recent years affected both areas.
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.).

From: GlobalPropertyGuide
Author: LALAINE C. DELMENDO

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