Foreign demand in the Cyprus property market is distributed unevenly

What has happened? The latest data on property sales in Cyprus shows clear trends in different locations. It is noteworthy that the picture in Nicosia contrasts sharply with the situation in the coastal areas.

Details. In the capital, the market is predominantly dependent on local buyers, while the coastal areas, witnessing a surge in transactions, owe this growth mainly to foreign investors, especially from non-EU countries.

Numbers. Looking at the broader picture across Cyprus, of the 22,500 property sales and transfers in the first eight months of this year, 7,408 involved foreign buyers, representing approximately 33% of the total. However, it is important to note that this percentage varies by district.

For example, in Limassol, 7262 transactions were recorded, 31% of which were carried out with the participation of foreign buyers.

Surprisingly, Paphos turned out to be the best choice for foreign investors, with 57% of the 4,573 transactions completed here. In the same district, 19% of buyers are from Europe, while 38% are from non-European countries.

The Nicosia market is still closely linked to the domestic market, with only 11% of buyers coming from abroad. Sales and transfers of real estate in the capital amounted to 5,447 from the beginning of the year to August.

Larnaca has a higher percentage of foreign buyers, with 34% of the 4,661 property transactions in the area involving foreign investors.

Famagusta district stands out, with the share of foreign buyers reaching 56%, although the total number of properties sold was relatively small - 617.

Opinion. Pavlos Loizou, CEO of Ask Wire, suggests the data highlight a division: Coastal areas rely heavily on foreign buyers, while Nicosia primarily caters to local residents. This makes the capital’s market more vulnerable to factors like rising living costs and interest rates.

Loizou says market rates are already showing signs of declining, with prices expected to gradually fall by up to 10% over the medium term. Developers will have to shift their focus to building housing that is attractive to the Cypriot market, which often requires bank financing and is more sensitive to rising construction costs.

Source: Ekathimerini

Photo by Mike Yukhtenko on Unsplash

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