Foreign property sales take a big hit

AS REPORTED last Friday, sales of property in Cyprus suffered a significant downturn in March as coronavirus fears hit house buyers. The Department of Lands & Surveys has recently released details of how each segment of the Cyprus real estate market has been affected.

Overseas property sales

Not surprisingly the greatest downturn in foreign sales occurred in Paphos, the most popular place for foreigners buying property, where sales fell by 65%. Foreign sales in Larnaca fell by 30%, while sales in Limassol, Famagusta and Nicosia fell by 29%, 14% and 6% respectively.

Total Overseas Property Sale Contracts – 2019/2020 Comparison

During the first quarter of 2020 the total number of foreign sales amounted to 575 compared with 750 over the first quarter of 2019; a decline of 21%.

Sales to EU nationals

Looking at the foreign sales figures in more detail, we can see that property sales to EU nationals fell by 47%, with sales in all districts falling (with the exception of Nicosia where they remained steady.)

Sales in Paphos fell by 59%, while sales in Larnaca fell 48%. Sales in Limassol and Famagusta fell by 45% and 29% respectively.

Foreign (EU) Property Sale Contracts – 2019/2020 Comparison

During the first quarter of 2020 the total number of sales to EU citizens stood at 299 compared with 361 over the first quarter of 2019; a fall of 17%.

Sales to non-EU nationals

The number of sales to non-EU nationals fell by 40% in March compared to March 2019, with sales falling in all districts (with the exception of Famagusta where they remained steady.) The two most favoured areas of the island were hit hardest.

Paphos saw sales falling by 69%, followed by Limassol where they fell by 25%. Meanwhile sales in Larnaca and Nicosia fell 22% and 14% respectively.

Foreign (Non-EU) Property Sale Contracts – 2019/2020 Comparison

During the first quarter of 2020 the total number of sales to non-EU citizens stood at 575 compared with 750 over the first quarter of 2019; a fall of 23%.

But we must remember that property sales to non-EU nationals has been declining since the government introduced stricter criteria for foreign investors seeking Cypriot citizenship.

Domestic property sales

Sales to the domestic market, which accounted for 58% of all sales in March, fell by 25% compared to March 2019.

Although sales in Larnaca and Nicosia rose by 19% and 8% respectively – and sales in Famagusta remained steady, falls of 60% in Limassol and 7% in Paphos more than wiped out the gains.

Domestic Property Sale Contracts – 2019/2020 Comparison

During the first quarter of 2020 the total number of sales to Cypriot citizens stood at 1117 compared with 1255 over the first quarter of 2019; a fall of 11%.

Analysis of property sales since 2000

Cyprus Property Sale Contracts 2000 – 2020

¹ The Department of Lands & Surveys has advised that overseas sales in 2018 and subsequent year should not be compared to sales in previous years due to changes in the methodology used to classify ‘Aliens’ (foreigners).

The future

With a lockdown in place and blanket ban on passenger flights, property sales will continue to fall until the restrictive measures are eased. Then it will take several months for things to return to any semblance of normality.

One of Cyprus’ other main sources of foreign income is tourism, which is facing a disastrous year. Cyprus tour operators say they are facing the worst crisis in their history after waves of holiday cancellations due to the coronavirus outbreak.

The Cyprus Finance Minister Constantinos Petrides has said that the economy is heading for a recession and could contract by 5% after five years of growth.