Overseas buyers accounted for the 13 per cent increase in April’s real estate sales compared to April 2021, with domestic sales falling by 3 per cent.
Domestic real estate sales
Domestic real estate sales in April, as measured by the number of sale contracts deposited at Land Registry offices, fell 3% compared to April 2021. The only district recording an increase in sales was Larnaca.
Sales during the first four months of 2022 reached 2,300, a 16% increase on the 1,984 achieved during the same period last year.
The falls are probably due to the conclusion of the subsidised purchases through the government scheme at the end of 2021 and rising inflation.
The scheme provided an interest subsidy of 1.5% for a period of four years for loans not exceeding €400,000 for house purchases.
Inflation hit 8.8 per cent in April, the highest figure in four decades. In an interview with the Cyprus News Agency, Finance Minister Constantinos Petrides said the government intends to extend the reduction in excise duty on fuel and the reduction of VAT on electricity bills possibly for another three months, depending on the evolving situation and the capabilities of public finances. But he cautioned that “things will be difficult in the coming years.”
(The figures include an unreported number of ‘non-sale’ agreements such as loan restructurings, recoveries and debt-to-asset swaps agreed between the banks and defaulting borrowers. Unfortunately, the Department of Lands & Surveys doesn’t record these separately.)
Foreign real estate sales
Sales to foreigners (non-Cypriots) performed well with sales up 50% compared to April 2021 with sales rising in all districts with the exception of Nicosia.
Paphos achieved the greatest number of sales, followed by Limassol, Larnaca, Nicosia and Famagusta.
Foreign real estate sales during the first four months of 2022 reached 1,647, a 98% increase on the 833 achieved in the same period last year.
On Tuesday, the cabinet approved a bill offering tax incentives to attract talent and promote headquartering in Cyprus.
A further bill is expected that will grant visas and work permits to spouses of professionals who opt to relocate to Cyprus.
Finance Minister Constantinos Petrides said “We are convinced that this program is one of the most competitive in the EU and already there is huge interest, particularly from high-tech companies which in recent years have selected Cyprus as the place to relocate their headquarters” adding, “We are certain that this bill will further boost the development of this sector, which constitutes a strategic aim for the government.”
The draft law reduces the minimum required annual salary from €100,000 to €55,000. For existing employees, it provides for a 50% tax break on remuneration from employment earning €55,000 p.a. exercised in Cyprus by an individual already in Cyprus.
The government’s headquartering initiative will further encourage real estate sales to foreign companies and their employees.
Foreign sales to EU nationals
Sales to EU nationals rose 57% compared to April 2021. Although sales in Nicosia and Larnaca fell, these were outweighed by increases in Limassol, Paphos and Famagusta.
Foreign real estate sales to EU nationals during the first four months of 2022 reached 808, a 115% increase on the 375 achieved in the same period last year.
Foreign sales to non-EU nationals
Although sales to non-EU Nationals rose by 44% compared to April 2021, sales in Nicosia and Famagusta sell for the third consecutive month.
The highest number of sales were recorded in Limassol, followed by Paphos, Larnaca, Nicosia and Famagusta.
Foreign sales to non-EU nationals during the first four months of 2022 reached 839, an 83% increase on the 458 achieved in the same period last year.
