Recovery of Overseas Property Sales in Cyprus

The past year has proven to be a difficult year for the global property market as a result of the COVID-19 pandemic, particularly when it comes to overseas property purchases. However, many countries are now beginning to see an upsurge in property demand in 2021, including interest from foreign buyers.

For Cyprus, overseas property sales saw a significant reduction in 2020 as a result of travel restrictions and rising coronavirus cases across Europe. However, dwindling demand appeared to be an issue for some time as, state that overseas property sales mostly fell month-on-month since June 2019.

During October 2020, foreign property buyers accounted for 35% of total sales during that month, rising 12% compared to October 2019. Property sales in Larnaca and Paphos fell by 34% and 6% respectively, however, there was a dramatic surge in sales in Nicosia (85%), Limassol (63%) and Famagusta (29%).

However, new property data has revealed that overseas property sales in Cyprus seem to be showing signs of recovery as global economic outlook continues to improve. Figures reveal that March 2021 saw a substantial surge within Cyprus property sales.

Cyprus Property Market

Cyprus property demand in 2021

During March 2021, residential property sales in Cyprus reached 826, which is a 62% rise from the same month the previous year, suggesting a significant improvement within the Cyprus property market.

In terms of domestic sales, many Cyprus citizens have been heavily impacted financially by the coronavirus crisis pandemic, with many keen to purchase a property with struggling with affordability. In October 2020, domestic property sales increased by 43% year on year, with sales rising across all major districts. Sales in Limassol increased by 84%, whilst sales in Famagusta rose 76%. Transactions in Paphos, Larnaca and Nicosia surged by 27%, 25% and 17% respectively.

For overseas property purchases, during September 2020 transactions were down 8% compared to September 2019, accounting for 33% of total property sales. Whilst this may sound disheartening, if we look at the data on a granular scale, there were three districts in Cyprus which saw a rise in purchases from foreign buyers.

Limassol saw an increase in property sales by 25%21% in Famagusta and 20% in Larnaca.

Paphos, which is the most popular area for overseas property purchases in Cyprus, saw a fall of 37%.

Rise in sales from EU countries

Data from the Department of Lands and Surveys have revealed that overseas property sales from the EU are on the rise, whilst sales from non-EU countries are on the decline.

Overseas property sales from EU nationals accounted for 16% of total sales in September, which is an 11% rise in comparison to September 2019.

Regarding non-EU nationals, September 2020 revealed a fall of 21% compared with September 2019. There was a significant rise in sales in Famagusta of 64%, however, this progress was overshadowed by a fall in sales in Nicosia by 53% and 50% in Paphos.

The Cyprus property market overall

Whilst the progress of overseas property sales hang in the balance, the Cyprus property market overall seems to be on the up. Cyprus property sales overall for September have managed to see a 14% increase in comparison to September 2019. Sales in Famagusta rose by 48%, Nicosia by 42%, Larnaca by 15% and Limassol by 5%.

For the year property sales in Cyprus fell by 19% compared to 2019, with 14,000 transactions compared to 17,200 in 2019. However, the figure is not surprising given the coronavirus restrictions and economic struggles of the country.

The areas hardest hit during the pandemic were Limassol and Paphos, whose sales figures fell by 36% and 47% respectively compared to 2019.

The future of the Cyprus property market

Property sales in Cyprus certainly seem to be heading in the right direction, as it’s forecast that the Cyprus property market will remain relatively stable in 2021. Although there may be a slight reduction in property prices in the near term, this is thought to be a temporary measure and prices are likely to increase towards the end of 2021.

Both the UK and US housing markets have seen a significant recovery in 2021 despite being hard hit by the coronavirus pandemic. As a result, its though that the Cyprus property market will follow suit as a result of pent-up demand.

However, it is currently not possible to say whether the progress seen so far will be sustainable. The progress follows many months of struggling sales and it is uncertain what the future holds for the Cyprus property market due to the ongoing effects of COVID-19. Post-Brexit uncertainties will undoubtedly place further pressure on property sales from foreign buyers, with the requirement for visas now in place for those wishing to stay within holiday homes for longer than 90 days.