Li­mas­sol and for­eign in­vestors are still driv­ing the mar­ket with 37% of trans­ac­tions car­ried out in Cyprus’ sec­ond city

Financial Mirror (Cyprus) - - CYPRUS -

The House Price In­dex (HPI) com­piled by the sta­tis­ti­cal ser­vice Cy­s­tat reached 103.98 units for the sec­ond quar­ter of the year, in­creas­ing by 0.6% com­pared to the first three months of 2018.

The YoY in­crease of the in­dex stands at 1.2% con­tin­u­ing the pos­i­tive trend of the past few years, pleas­ing real es­tate spe­cial­ists. But they are con­cerned about how in­vest­ment funds ac­quir­ing prop­er­ties linked to NPLs will choose to un­load these as­sets to the mar­ket.

Prop­erty spe­cial­ists are con­fi­dent over the fu­ture of the sec­tor, say­ing that the up­ward trend in house prices is com­bined with an on­go­ing in­crease in de­mand for real es­tate.

Ac­cord­ing to data from the Land Registry, 4,500 homes were sold in the first half of the year, 27% more than the num­ber of trans­ac­tions filed with the registry for the same pe­riod in 2017.

Ex­perts ex­pect the trend to con­tinue through­out 2018 sur­pass­ing last year’s sales which reached an eight-year high with 8,734 trans­ac­tions. In 2017 prop­erty sales on the is­land saw a stag­ger­ing 132% growth from 2013 when sales had dropped to un­der half of what they were in 2010, the sec­tor also grew by 24% from 2016.

Ac­cord­ing to the pre­lim­i­nary re­sults of re­search con­ducted by a group of real es­tate spe­cial­ists, Li­mas­sol and for­eign in­vestors are still driv­ing the mar­ket with 37% of trans­ac­tions car­ried out in Cyprus’ sec­ond city, fol­lowed by Paphos with 23%, Ni­cosia with 18%, Lar­naca 15% and lastly Fa­m­a­gusta with 7%.

All dis­tricts have recorded a sig­nif­i­cant rise in trans­ac­tions with even Lar­naca, the only dis­trict with a neg­a­tive growth in­dex for 2017, record­ing a 15% rise in prop­erty sales.

“The in­vest­ment for cit­i­zen­ship scheme is still play­ing its role in mar­ket growth. Trans­ac­tions in­volv­ing for­eign in­vestors have more than dou­bled with Li­mas­sol and Paphos hav­ing the lion’s share with 70% of trans­ac­tions in­volv­ing for­eign­ers,” a prop­erty spe­cial­ist ex­plained.

The spe­cial­ist said that although Paphos is lead­ing the charts as far as the num­ber of ac­tual trans­ac­tions in­volv­ing for­eign in­vestors is con­cerned, with 39%, prop­er­ties sold in Li­mas­sol are worth sub­stan­tially more.

Op­ti­mism over the fu­ture of the real es­tate sec­tor also stems from the rise in the num­ber of build­ing per­mits is­sued and the di­ver­si­fi­ca­tion of projects.

The spe­cial­ist said that 3,100 per­mits were is­sued in the first half of 2018 com­pared to 2,900 in the same pe­riod last year.

“We are not talk­ing about only an in­crease in ab­so­lute num­ber, but also of an in­crease in the value of projects for which li­censes have been is­sued in the first six months of the year which amounts to EUR 750 mln. In the same pe­riod in 2017, projects ob­tain­ing li­censes were worth 650 mln,” he said.

The spe­cial­ist said there is a se­ri­ous in­crease in the num­ber of prop­erty sales to lo­cal buy­ers and this is ev­i­dent by the num­ber of trans­ac­tions car­ried out in the cap­i­tal and build­ing per­mits is­sued for Ni­cosia projects.

“If one is to look at sales car­ried out in each dis­trict, you will see that the cap­i­tal has recorded an im­pres­sive YoY in­crease of 34% in trans­ac­tions, the vast ma­jor­ity in­volv­ing houses and Cypriot buy­ers.”

Adding to the pic­ture, Ni­cosia leads in build­ing per­mits is­sued with 39% of the to­tal, keep­ing Li­mas­sol in sec­ond place with 29%.

It comes as no sur­prise that a sig­nif­i­cant chunk of ac­tiv­ity re­gards the con­struc­tion of houses said the spe­cial­ist.

“It’s only nat­u­ral that the key find­ing of re­ports con­cern­ing the sec­tor is that a sig­nif­i­cant chunk of the in­dus­try’s ac­tiv­ity con­cerns hous­ing. Nei­ther should it come

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