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