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26th February 2024
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HomeArticlesWhat to expect for the real estate sector in 2023

What to expect for the real estate sector in 2023

The positive trend in the sales of real estate appears set to continue during 2023, facilitated by foreign buyers, originating from both EU and non-EU countries.

At the same time there is a rising trend of sale prices and rents, driven by high demand and the increasing prices of building materials.

We need to stress that the financial environment in 2023 appears, at this time, to be affected by some important fiscal parameters.

The growth rate, (GDP), in 2023 is expected to be around 3%, a healthy increase, after a higher growth in 2022 at 5.7% coming as a reaction to the decline of 2020. Inflation is expected to improve in 2023 compared to 2022 and should be around 4% compared to 8.1% in 2022.

It is within these parameters that the construction sector has been working full steam, as beyond the private field there are a lot of state and private projects under way, with major European Recovery Funds on their way as well.

New constructions

New construction developments, especially residential ones could see some decrease in demand due to sale price increases as well as increased interest rates and an expected reduced VAT sponsorship, factors which should be clearer quite soon.

Something worth pointing out and bound to act positively is the higher sales volume coming from foreign buyers. For example, this January 2023 they accounted for 54% of total sales.

It should be noted that in 2022 there was a 30% increase in real estate sales transactions (contracts deposited at the Land Registry) with Limassol at the top of the table, followed by Paphos. Of the 13,409 real estate sales transactions in 2022 (the highest number since 2008) 5,928, 44%, concern foreign buyers. This significant increase sends the message that perhaps foreign buyers will have a strong and healthy presence in 2023 as well. We should emphasise that while in 2022 50% of foreign buyers were from within the EU, last January three out of four were from outside the EU.