This migration resulted in property sales increasing by more than 42%. What awaits investors this year? Will prices for Cypriot real estate rise? Let's look at this and much more below.
State of the market
In the first half of this year, more than 6,700 property transactions were completed. For comparison, 6,263 properties were sold in the same period the previous year. The rise in the number of transactions points to fairly high demand for residential and commercial real estate.
Most apartments were sold in Limassol and Paphos. These two cities account for more than 70% of transactions.
What explains the popularity of Cyprus real estate? First, ownership of a residential property gives investors the right to apply for a residence permit, and second, the owner of a residential property gets the opportunity to substantially grow their investment capital over a few years.
Last year, the average yield on apartments located in Cyprus was 4.97%. This year the figure has stayed at the same level. Standalone houses are in less demand. Rental yield for this category ranges from 2.6-3%, depending on the property's location.
The highest yield percentage is on property located in Limassol and Nicosia. It is precisely these cities that are in maximum demand among tourists.
New builds
Investing in primary-market real estate is the most optimal way to grow initial capital. The size of the investor's benefit in this case depends on the stage of construction at which the buyer signs a contract with the developer.
From a financial standpoint, it is best to buy residential units at the foundation-pit stage. By the time the building is handed over, the price of apartments in it will have risen by 10-15%.
Additional advantages of buying new builds in Cyprus include:
- fairly fast handover timelines;
- the use of modern technology;
- the ability to purchase a liquid residential unit in installments;
- developer promotions and flexible payment schemes (the buyer pays part of the amount when signing the contract, with the balance transferred to the developer a few days before the key handover date).
In addition, buying apartments in new builds substantially simplifies the subsequent process of renting the property out. The owner of the apartment can sign a contract with a management company and delegate to its staff the rights to move tenants in and out. Naturally, this comes at a cost: management company services typically cost from 10 to 15% of the annual rental value.
The main advantage of working with management companies is the ability to rent out the property remotely.
The overwhelming majority of primary-market properties fall into the premium real estate category. The price of premium apartments has risen by 10% on average. The reason for this rapid growth is simple: during the first half of the year.
The Cyprus secondary real estate market
Secondary-market properties are less popular: this category of housing does not participate in the investment program for obtaining Cyprus residency. However, the price of apartments and houses belonging to the secondary market is gradually rising.
The main advantages of buying secondary-market properties are:
- a diverse selection;
- housing located in historically significant areas of Cyprus;
- developed infrastructure and good transport access;
- the ability to move into the apartment at any time.
In addition, a person who buys a secondary-market property can start earning rental income from the very next day.
However, things are not as rosy as they may first appear. Although the Cyprus secondary real estate market has many advantages, it also has its drawbacks. First, apartments that someone has previously lived in need renovation. This is an additional expense not every investor is prepared for.
Second, buying secondary-market property is a legally riskier option. Experienced specialists at MIRBEZVIZ recommend conducting thorough legal due diligence before signing a purchase agreement. This is the only way to confirm the transaction is clean and free of encumbrances.
Popular cities in Cyprus
Limassol is Cyprus's second capital. This city is the most popular among both investors and tourists. It is precisely this factor that is driving up prices for residential properties.
Limassol has the most expensive real estate. As of 2023, prices per square meter for apartments located in this city are, on average, twice as high as in the rest of Cyprus. Nevertheless, Limassol has recorded the highest number of property transactions (about 30% of the total). The price per square meter in Limassol ranges from 2,300 to 3,300 euros.
Second place goes to the city of Paphos. The city is located away from Cyprus's major urban centers, but this has not affected its popularity in any way. Compared to last year, the number of property transactions completed in this town has grown by 88%. This can be explained by the relatively low price per square meter (from 1,200 to 2,300 euros).
Nicosia is the capital of Cyprus, the third most popular city and the second most expensive for real estate. This town has no coastline, but it is precisely here that the country's business activity is concentrated. This is why prices per square meter of residential real estate in this town range from 1,700 to 2,450 euros.
How to get a residence permit through a property purchase
One of the fastest ways to obtain official status is by buying property worth from 300,000 euros. To participate in the investment program, you need to buy one or more residential or commercial units on the primary market. Along with the main investor, the following can also apply for a residence permit:
- their spouse;
- minor children;
- children up to age 25 who are students;
- children of any age who have physical or psychological disabilities.
After five years of living under residence permit status, a foreign investor becomes eligible to apply for Cyprus citizenship. Holding a Cypriot passport allows visa-free border crossings into 170 countries.
Ownership of property worth more than 300,000 euros gives the investor the opportunity to buy a stake in a promising local business project, provides access to quality healthcare, and secures the right to study at the country's best universities.
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