Cyprus’ real estate market in February recorded a 7 per cent increase in property sales, compared to the same month last year, with Limassol, Larnaca and Nicosia all achieving sales of 300+ in the month.
Although sales in Famagusta and Paphos fell by 25% and 10% respectively, sales in Larnaca rose 36%, while sales in Nicosia rose 13% and sales in Limassol, despite recording the smallest rise, still saw a 5% increase in the number of property sales contracts deposited.
Despite a positive trend in property sales, concerns remain over foreign buyers driving up prices making it very difficult for young Cypriots to buy or rent a home of their own.
Cyprus is facing a housing crisis, with rent or mortgage payments exceeding 40% of household income, making homeownership difficult, especially for young people and middle-income families. With house prices at seven times the average household income (€270,000 vs. €38,000), affordability is a major issue, leading to delayed family planning, rejected university offers, and job refusals due to high housing costs.
To address these challenges, the Cyprus Real Estate Agents Registration Council has proposed banning daily accommodation rentals, while nearly one-third of Airbnb listings are unregistered and therefore illegal.
AKEL has also suggested scrapping the 5% reduced VAT rate for foreign buyers to prioritize lower and middle-income families.
However, the Attorney General’s office recently rejected a proposal to cap short-term rental properties, allowing investors to continue acquiring multiple units and competing with hotels without being subject to the same regulations.
Cyprus is building affordable housing, which should help young people get on the housing ladder, but this housing can also be bought by overseas investors and therein lies the problem to be resolved.
Cyprus property sales – market segment analysis
Property sales to the domestic (Cypriot) market
In February, sales to the domestic market rose 6% compared with February last year. Falls of 32% in Famagusta and 30% in Paphos were more than outweighed by increased sales in Larnaca (64%), Nicosia (8%), and Limassol (1%).
Overall, domestic sales for the first two months of 2024 are up 15% compared to the same period last year. Although sales in Paphos and Famagusta fell by 18% and 15% respectively, they rose 43% in Larnaca, 23% in Limassol, and 13% in Nicosia
Property sales to the overseas market
Sales to the overseas market (including both EU and non-EU citizens) in November rose 8% compared to February 2024. Although sales fell18% in Famagusta, they rose 38% in Nicosia, 9% in Paphos and Larnaca, and 6% in Limassol.
In the first two months of 2024, overseas sales have risen by 10% compared to the same period last year, with all districts reporting gains.
Sales in Nicosia up 14%, Larnaca up 13%, Famagusta up 13% Limassol up 11%, and Paphos up 6%.
Property sales to EU citizens
Sales to EU citizens increased by 31% in February compared to the same month last year, with all districts reporting increased sales.
Sales in Nicosia up 41%, Paphos up 32%, Limassol up 30%, Famagusta up 29%, and Larnaca up 25%.
In the first two months of 2024, sales to EU citizens have risen 37% compared to the same period last year with sales rising in all districts.
Sales in Famagusta up a remarkable 105%, Paphos up 52%, Nicosia up 32%, Limassol up 19%, and Larnaca up 11%.
Property sales to non-EU citizens
In February, property sales to non-EU citizens fell 1% compared to February last year.
Although sales in Nicosia, Larnaca and Limassol rose by 36%, 2% and 1% respectively, they fell by 57% in Famagusta and by 2% in Paphos.
In the first two months of 2024, property sales to non-EU citizens remained virtually unchanged compared to the same period last year.
Although sales in Famagusta and Paphos fell by 38% and 9% respectively, they rose by 13% in Larnaca, 8% in Limassol and 2% in Nicosia.
Market Segment Summary
The chart below illustrates the popularity of each district among different market segments. In Paphos, which is particularly attractive to those seeking holiday homes, property sales to non-EU nationals alone exceed those to the domestic market. The least favoured district for overseas investors is the island’s capital Nicosia.
Anyone who buys from a developer has simply not done their homework.