The latest analysis of sales contracts issued by the Department of Lands and Surveys reveals that overseas buyers appear to be turning away from Paphos and Limassol and choosing to buy in the less expensive districts of Larnaca and Famagusta.
Overseas sales in Larnaca have increasing due to heightened interest from Israeli investors according to media reports. It seems that others overseas investors who are looking for a holiday home in the sun are turning to Famagusta.
But now the future of the Larnaca marina & port development appears to be in jeopardy according to reports in the Greek media. It seems likely that Alexis Vafeades, the Minister of Transport, Communications and Works, may terminate the contract with Kition Ocean Holdings and Around Town.
Speaking to Stockwatch the Minister said that “ “the contract agreed with the contractor company is very complicated.
“However, in case of its termination, there is a provision according to which the management of the port, which is one of the main operational infrastructures of the state, must be transferred to the Port Authority within 30 days.”
The Minister went on to stress that “We have now lost all hope that the contractor company intends to renew the €10 million guarantee and proceed with the construction of the project, so we are acting based on our own obligations to protect the public interest.”
Only time will tell how this will affect future property sales in Larnaca district.
Why waning interest from overseas buyers?
One possible reason for the decline in overseas buyers in Paphos & Limassol is the revised rules for obtaining permanent residency in Cyprus, which currently requires an applicant to invest a minimum of €300,000 and have a secure annual income from abroad of €50,000 plus an additional €15,000 for their spouse and €10,000 for each child.
Parliament is currently discussing legislation to replace the Category F application process, which has seen no approvals in the last few years, despite still being theoretically active. The proposed regulations would lower the investment threshold to €250,000 and reduce the income requirement to €40,000 for the applicant, with an additional €10,000 for each dependent.
AKEL have also submitted a proposal to relax the law. They want the Minister of the Interior to allow foreigners to obtain citizenship even if they have insufficient knowledge of the Greek language. Applicants would need to have a good grasp of the basic elements of the contemporary political and social reality of the Republic of Cyprus.
Property sales – market segment analysis
Sales to the domestic (Cypriot) market
The total number of sales to the domestic market in April 2024 rose 34% compared to the same period last year and accounted for 63% of the total number of sales in the month.
With the exception of Paphos (where sales fell by 26%) sales in Limassol, Nicosia, Larnaca, and Famagusta rose by 55%, 48%, 36% and 7% respectively.
Sales to the domestic market in the first four months of 2024 reached 3,001; an increase of 20% on the 2,504 achieved in the same period of last year. With the exception of Famagusta, all districts recorded gains.
Sales to the overseas market
The total number of property sales to the overseas market (both EU and non-EU citizens) in April 2024 fell 8% compared to to the same month last year.
Increased sales in Larnaca, Famagusta, and Nicosia were wiped out by falls of 46% in Paphos and 6% in Paphos. (However, it’s worth nothing that in terms of the number of properties sold to overseas buyers, Paphos was still the most popular.)
On an annual basis, overseas sales rose by 16%, with increased sales in all districts with the exception of Famagusta. Despite the recent fall in sales, 2023 saw the highest number of sales to the overseas market since the market peaked in 2007.
Sales to the overseas market in the first four months of 2024 reached 1,962; a fall of 13% on the 2,262 achieved in the same period of last year. With the exception of Limassol & Paphos, all districts recorded gains.
Property sales to EU citizens
Sales to EU citizens rose 4% in April compared to the same month last year accounting for 11% of the total number of sales (1,366) achieved during the month.
While sales rose by 133% in Nicosia, 60% in Larnaca and remained steady in Famagusta, they fell 36% and 13% in Limassol and Paphos respectively.
Sales to EU citizens in the first four months of 2024 reached 563; a fall of 4% compared to the same period last year, with only Nicosia and Famagusta gaining ground.
Sales to non-EU citizens
Sales to non-EU citizens fell 12% in April compared to the same month last year accounting for 27% of the total number of sales (1,366) achieved during the month.
While sales rose in Famagusta and Larnaca, they sell in remaining three districts
Sales to Non-EU citizens in the first four months of 2024 reached 1,399; a fall of 17% compared to the same period last year, with Limassol and Paphos being worst affected..
“One possible reason for the decline in overseas buyers in Paphos & Limassol is the revised rules for obtaining permanent residency in Cyprus, which currently requires an applicant to invest a minimum of €300,000 and have a secure annual income from abroad of €50,000 plus an additional €15,000 for their spouse and €10,000 for each child”.
In my own opinion, one of the biggest problems the government has created. Provided a non EU permanent resident is not a burden on the state, I fail to see why such strict requirements. A form of vetting yes but €50,000 a year income plus €10,000 for a spouse, when many are retirees is economic suicide. Few people of retirement age will have as a couple €60,000 income, or even the proposed amended €50,000.
But an EU national can come just enough to survive. I fail to see what the difference. If someone has reasonable means to support and has been assessed a good character (as best you can), no issue imo.
I wrote about this in July last year when the income requirement was €24,000 for a single person, plus at least a further €4,800 for their spouse. Brexit shatters retirement dreams.
They’ve raised the bar significantly since then!
It’s also not clear about what happens if the applicant dies and the surviving spouse is receiving the minimum €10,000. Will he/she be deported?