2020 Cyprus Country Report

In this last year the
Ministry of Interior, as
the most polythematic
Ministry of the Republic
has faced a lot of
challenges. The rapid
growth of recent years
has necessitated reforms
in many areas of the
Ministry’s competence
in an effort to improve
and enhance the
citizen’s quality of life,
whilst also reinforcing
overall development
in the country. Within
this framework we are
proceeding with radical
reforms in the fields
of urban planning and
licensing, and the local
authorities’ model,
expecting to enhance
the urban and rural
development of the island.
Nicos Nouris
Minister of Interior
national lockdowns have struck a severe blow to
the industry. Sales and construction ground to a
standstill for several months and many projects
are experiencing delays and set-backs despite the
local lockdown measures having been lifted. The
general insecurity and uncertainty in the global
market due to the pandemic has decreased the
appetite of investors to invest in foreign markets
and industry experts forecast that the sector will
not see signs of a rebound until 2021 – which may
also result in price reductions across the market
spectrum.
UPWARD SWING IN 2019
Developments and figures from 2019 underline
the fact that Cyprus remains a desirable investment.
The real estate market has constantly been
developing and introducing more innovative
projects that are upgrading Cyprus’ offering to
global investors and house hunters. The upward
trend in Cyprus real estate sales has been steadily
rising since 2014, when property sales first picked
up following the 2010 peak of the European sovereign
debt crisis, and in 2019 annual property
sales were the highest on record since 2008 with
sales rising in all districts.
Most notably, there was increased demand for
grade A offices at prime locations in city centres,
apartment units within close proximity to employment
hubs, and housing units in specific
suburbs, which has pushed the industry to diversify.
The residential market has seen a big leap
forward from years of stagnancy following the
global financial crisis with a substantial number
of large residential complexes currently under
construction in all major cities by top developers
such as Cybarco, Cyfield and Pafilia, adding to
the supply of new luxury residential space.
In the first half of 2019, investment activity
levels were high. Total transaction value in the
real estate sector reached €2.5 billion representing
an increase of 25% compared to H1 2018,
while construction activity expanded with the
total value of building permits doubling. This
significant boost was fuelled by foreign capital
flowing into the residential property sector.
Although there was a sharp 35% decrease in Q3,
the number of sales contracts dropped only by
3%. Interest from foreigners, and predominantly
from non-EU buyers, continued to be the key
driving force in the market, representing approximately
45% of total transaction value during H1
2019. The high-end residential property segment
continued to be critical during the first half of the
year, with total transaction value of properties
with a price tag of over €1.5 million increasing by
46% compared to H1 2018.
SLOWDOWN IN 2020
In the first four months of 2020, 45% of all
properties sold were purchased by foreigners,
with Limassol and Paphos being by far the most
popular locations and the districts with the largest
share of luxury residential property transactions
– proving there continues to be global interest in
Cyprus. However, as expected, there has been a
reduction in the foreign buyer interest due to the
flight and travel restrictions to Cyprus.
Following the coronavirus outbreak, the
trends in the local real estate market are similar
to global ones. Commercial property and in particular
hotels and retail have been hit hard, as
have offices due to the increase in working from
home. Residential units and plots of land, on the
other hand, appear to be more resilient to the
effects of the pandemic.
Sector Profile
View from 360, Cyfield
Country Report CYPRUS 2020 67