Cyprus is a sunny island located in South-East Europe in the Mediterranean Sea. It is the third-largest island in the Mediterranean and crossroads for many civilizations for centuries. It has the size of 3,572 sq mi which is slightly bigger than New York, Metropolitan Area and has one of the best climates worldwide, up to 340 days of sunshine a year. It’s coastline is 402.6 mi and has a population of approximately 1.2 million people, where this number more than doubles in tourist season.
Cyprus has been part of the European Union since May 2004, opening up its borders for free trade, travel and residency for Europe. It has the youngest population and workforce in the EU, and 55% of its workforce has an education of Masters degree or higher. The currency used is Euros (€) since 2008, adopted after joining the EU and has abolished the use of Cyprus pound in doing so.
The political system of Cyprus is the Presidential Democratic Republic and currently, the president of Cyprus is Nicos Anastasiades, since February 2013 serving two consecutive terms. The island has three official languages; Greek, Turkish and English. Being an Ex-British colony, English is one of the national languages and is widely spoken, its reminisces are also prominent in the strong dialects of the Greek and Turkish spoken on the island. More British reminisces are evident in the simple aspects of life like left-lane driving, G-sockets for the plugs, love for beer and the teaching of the British education system in some public and private schools.
Cyprus is easily accessible from Europe with direct flights and no visa requirement for the EU members. There are also many one-stop transit flights from the States. The travel is conducted using the two International airports and two deep sea ports. The two airports are in Larnaca and Paphos.
Cyprus had been a part of many empires, starting with the earliest civilizations in stone-age, followed by Hellenistic period, Roman, Byzantine-empire, Lusignans, Venetians, Ottomans and British. This has left a remarkable impact on the island’s diverse culture, architecture, historic-artefacts and landmarks. Island has always been popular with celebrities and in the past American actresses Elizabeth Taylor and Sophia Loren were home-owners and frequent visitors. Harbor bars and restaurants, shopping alleyways, traditional cuisine full of delicious flavors and local taverns also provide culturally rich and diverse entertainment.
Cyprus have warm and welcoming communities with rich culture and cosmopolite living with one of the lowest crime rates. It is one of the top 5 safest countries in the World and violent crimes are next to zero. Aside from the safety of life, there is an excellent regulatory structure, closely aligned to the English common law legal system and a strong protection for investment and intellectual property rights.
Cyprus also has cheaper closing costs compared to Portugal, Italy, Spain and many others when purchasing a property in the Mediterranean. It has an attractive Tax Regime with low rates and simple procedures, the process of transferring Title Deeds is also recently further simplified for overseas investors.
Cyprus has one of the fastest-growing economies in the EU with a 3,5% GDP growth, it performs better than the EU average of 1,6%. As of 2019 unemployment drops to 7,0% and inflation drops to 0,5% both significantly lower than the EU average. Credit Rating assessments have been improved allowing Cyprus to tap international markets with 3 new international bonds attracting demand in excess of €10bn.
Economic impact of different sectors ranked below according to their Gross Value Added (GVA):
1-Tourism, wholesale and retail trade (25% GVA)
2-Financial, Professional and other activities (21% GVA)
3-Real Estate and Construction (15% GVA)
These sectors are followed with Manufacturing, Information and communications, Arts and entertainment, electricity, gas, water supply and management.
Tourism in Cyprus is bigger than ever, between the first and the third quarter of 2018 the tourism generated € 2,3 Billion in revenues. Hotels have higher occupancy rates compared to Greece, Spain, Italy or Malta. Cyprus is also the EU’s largest ship management centre and amongst the top three in the world. The real estate and Construction sectors are currently the fastest growing sectors in Cyprus with 11% growth in 2019. The Government has recently signed a deal with a multinational firm for the development of a luxurious integrated casino resort to be completed by 2021, estimated to contribute €700 million ($826 million) annually amounting to 4% of the annual GDP.
In the early 2010s, the Cypriot Real Estate market was booming with record-high levels of sales in terms of contracts being registered. This was followed by the financial crisis in 2013 with a rapid fall in sales, the market crashes. Provision of financing for RE developments also becomes challenging due to the banking sector downsize and changes in lending procedures and criteria. Since 2013, the market has seen a stable and steady growth, in value and sales. In 2017, the sector fully caught back up to the levels prior to the crisis. In 2018, sales revenue reached a peak, with foreign buyers being one of the driving forces. Increasing investor appetite for upmarket products and larger exclusive projects, such as luxurious apartments on high-rise beach-front developments, marinas, golf resorts, shopping malls, tourist developments, etc. This growth is expected to continue at a steady rate.
In terms of RE prices, there is an increase between 2 – 5% year-on-year from 2013 to 2019 and almost half of the sales in 2019 were foreign purchases and 70% of these were non-EU nationals. The high-end residential property segment represents 20% of the total transaction value including residential, lands and commercial sales. Transaction value in high-end segment stood at €520mln with 225 high-end residential property sales in 2019. Real Estate rental yields have shown a steady increase in Cyprus around 4.7 – 5.6%. Highest rise came from Limassol with 17,4% increase. Let’s have a look at the segmentation of the RE market for every city:
#1 Limmasol
Limassol is on the southern end of the island.
It has a population of 154,000 people with a very big cosmopolite population with the majority of them being from Russia.
Limassol is home for Marina-front high-rise luxury apartment complexes.
Majority of the sales recorded in the country are from Limassol City, both in quantity and value (44% of value in 2019).
The main driver for these purchases is the foreign buyers, especially the Non-EU purchasers.
The City also holds the majority of the development, with value of new building permits issued.
The type of properties that are in high demand are residential luxury properties.
In Limassol the property prices per ft2 varies between 219$-438$ in city center.
#2 Paphos
Paphos is located on the western-end of the island.
It has a population of 36,000 people with a very big expat community.
It is home for the famous Aphrodite’s Rock where in Greek’s Mythology, the Goddess of Love rose from the sea.
It is known for its beautiful golf courses.
Paphos is also home for one of the two international airports in Cyprus.
Paphos RE market is not comprised of high rise buildings unlike Limassol, it is home to luxury villas, family homes and private real estate usually within gated communities. RE market predominantly driven by foreign buyers is ranked second in terms of transaction value after Limassol. Paphos, again is second following Limassol in terms of foreign interest and in terms of construction activity it comes third after Limassol and Nicosia.
In Paphos the property prices per ft2 varies between 165$-198$ in city center.
#3 Nicosia
Nicosia is the capital of Cyprus, located in the center of the country and is where the major crossings to the North are located.
It has a population of 200,500 people, with the majority being local Cypriots.
It also is the center for administration and most of the residents are white-collar working people.
It is also home for the biggest University, library and students population on the Island.
The RE market in Nicosia is comprised of low-rise residential buildings, hotels and shopping malls.
Nicosia holds the second highest share of building activity (27%) in the Country and in 2019 30% of the sales took place in the Capital.
In Nicosia the property prices per ft2 varies between 132$-235$ in city center.
#4 Famagusta
Agia Napa is located on the eastern-end of the island.
It is a town of Famagusta City which has a population of 42,500 people.
Agia Napa is the entertainment capital with an Ibiza-like reputation and is home for many quality hotels.
It is also home for the beautiful salt lake where pink flamingos visit a few months every year.
Ayia napa hosts more than 1mil tourists a year and is very popular with the British vacationers.
Soylem Coli
Broker Assistant, Avertiss Real Estate
October 20, 2020. Kyrenia, North Cyprus.
Mediterranean Condos by Soylem Coli 