In recent years, it is unable to deny that Cyprus economy has been well stabilized and developed significantly. Along with that factor, Cyprus real estate has also began to show some positive trends. For example, latest data has illustrated the increase in apartment prices by 1.5%, and a similar increase in the prices of private houses is 2%. In fact, the city of Larnaca has seen the fastest growth in real estate with a 7% rise. The main reason behind this is because Larnaca plays a role of the cultural, economic and financial center of the republic. Just behind this growth leader, the prices in the real estate industry in Famagusta have successfully risen  by 4% in spite of being quite a small city.

The fall of Cyprus real estate market in the past

A few years ago, the country’s financial crisis was the main factor that caused Cyprus’ real estate market  to experience a poor performance. There was a moment in the past when developers in Cyprus could not be persuaded to build new ready-made properties, as a result, the demand in the construction industry was falling fast. Despite the fact that in 2016, Cyprus real estate market was appealing and attractive to buyers inside and outside the country, in 2017, this need for purchasing houses, apartments and villas dropped by 50%.

How Cyprus real estate market recovered

Now that the economic situation seems to have stabilized, the number of transactions regarding real estate matters in Cyprus has increased significantly. A research was conducted and it showed that the GDP growth of the country in 2018 was 3.8%, and at the same time, unemployment rate fell to 7%. Further, residents in Cyprus, also known as Cypriots have started to put their trust in the country’s banking system and also tend to apply for real estate loans when they show their interest in buying new properties. It was also a good sign as well when foreign citizens were attracted by the Greek government. This happened when the real estate taxes were eliminated and the government introduced a program called Golden Visa. Basically, foreign investors could receive a residence permit as long as they abide by the set conditions when buying properties in Cyprus.

In the year 2018, real estate in Limassol was the hottest market across Cyprus. 37% of property purchasing transactions in the country’s total revenue was recorded to be made in this port city and EU citizens accounted for 40% of the total number of investors. When we make a comparison with the statistics in 2017, foreign buyers acquired twice as much as Cypriot buyers did and this group of buyers accounted for nearly half of all property transactions in the country.

Another bright spot of this country’s real estate industry was the prosperity of residential rents in recent years. According to a survey implemented and released by DANOS / BNPPRE, compared to 2017, the country’s rent prices have increased by an average of 15%. Meanwhile, employee wages also increased but had a slower pace than the rent prices. The viral existences of Airbnb and other housing platforms were the main reason behind the story, it helped Cyprus real estate market change in a better way. For more information, instead of buying properties, an increasing number of students and Cypriots showed their interest in renting to help sustain their finance and flexibly choose their ideal homes. This factor also led to one negative trend when last year, Cyprus real estate market experienced a sharp decline in sales in December. In comparison with the period in 2017, the demand for properties for sale has reduced by half. However, despite this unimpressive statistic, generally speaking, local residents and foreigners in the country showed their interest in Cyprus property market and this trend has been rising steadily for more than 10 years. The city of Nicosia has experienced the biggest increase in annual sales since 2008 with a growth rate of 10%. This rate was 8% in Limassol and 5% in Paphos.

Why Cyprus real estate market demand increased in recent years

There are several reasons behind this factor, some can be listed as:

  • Cyprus is an ideal place to choose to spend the summer holidays thanks to the comfortable Mediterranean climate.
  • Due to the “Golden Visa Program”, by buying a property at the minimum price of EUR 300000, investors are able to receive a residence permit to stay in Cyprus and travel around Europe. Recent studies have also proven that the Republic of Cyprus accounts for the second most appealing country for those who have an intention to acquire a residence permit by means of real estate investments.
  • Property prices in Cyprus presents to be more democratic than in other states.

Predictions in Cyprus real estate market in 2019

According to the results of the ZyForecast tool, in Limassol, apartment prices are predicted to increase by 6.63% in 2019, while the house prices are expected rise slowly by 2.77%. In Paphos, the apartment prices are likely to grow by 7.49% while the house prices will increase by 1.9%. The forecast in Larnaca seems to be different from the other two cities, apartments are expected to increase by 3.57% in terms of price and house prices will increase strongly by 4.73% on an annual basis. In the area of Famagusta, the growth in apartment prices is expected to increase by 2.57% yearly and by 4.99% regarding house prices. Last to be mentioned is Nicosia, annually, prices of apartments are predicted to rise by 1.96%, contrary to house prices where forecasting suggests a slight increase by 1.81%.