As a result of the COVID-19 epidemic, the global property market has had a terrible year, particularly when it comes to international property transactions. However, in 2021, several countries are starting to witness an increase in property demand, notably from overseas buyers.
As a result of travel restrictions and an increase in coronavirus infections across Europe, overseas property transactions in Cyprus decreased significantly in 2020.
Foreign property buyers accounted for 37 percent of total sales in October 2020, up 13% from October 2019. Property sales in Larnaca and Paphos declined by 32% and 7%, respectively; while, sales in Nicosia (88%), Limassol (65%), and Famagusta (80%) increased dramatically (31 percent ).
New property data, on the other hand, shows that abroad property sales in Cyprus are showing indications of revival as the global economy improves. According to statistics, property sales in Cyprus increased significantly in March 2021.
Property demand in Cyprus in 2021
Residential property sales in Cyprus increased by 63 percent in March 2021 compared to the same month the previous year, indicating a considerable improvement in the Cyprus property market.
In terms of domestic sales, the coronavirus crisis has had a significant financial impact on many Cypriots, with many people eager to buy a home but unable to do so due to financial constraints. Domestic property sales grew by 43% year over year in October 2020, with sales increasing in all major districts. Limassol sales surged by 84 percent, while Famagusta sales increased by 76 percent. Paphos, Larnaca, and Nicosia had a 25 percent, 22 percent, and 19 percent increase in transactions, respectively.
Transactions for overseas property acquisitions were down 10% in September 2020 compared to September 2019, accounting for 35% of overall property sales. While this may sound discouraging, when we look at the statistics on a more detailed level, we can see that there were three districts in Cyprus that showed an increase in foreign buyer purchases.
Property sales increased by 24 percent in Limassol, 22 percent in Famagusta, and 21 percent in Larnaca.
Paphos, the most popular area in Cyprus for offshore property purchases, suffered a 35 percent drop.
Sales from EU countries are increasing
According to data from the Department of Lands and Surveys, foreign property sales from EU countries are increasing, while sales from non-EU countries are decreasing.
In September, sales of overseas property by EU nationals accounted for 16 percent of overall sales, a 12 percent increase over September 2019.
Non-EU nationals saw a 23 percent decrease in September 2020 compared to September 2019. Famagusta saw a 66% increase in sales, however this was dwarfed by a 553 percent drop in Nicosia and a 52 percent drop in Paphos.
The property market in Cyprus as a whole
While the status of offshore property transactions remains uncertain, the Cyprus property market appears to be improving overall. In comparison to September of last year, property sales in Cyprus increased by 17% in September of this year. Sales increased by 49 percent in Famagusta, 43 percent in Nicosia, 17 percent in Larnaca, and 6 percent in Limassol.
Property sales in Cyprus declined by 20% this year compared to the previous year, with 14,000 transactions compared to 17,300 in 2019. However, considering the country’s coronavirus restrictions and economic challenges, the figure is not surprising.
Limassol and Paphos were the hardest hit during the epidemic, with sales falling by 33% and 49%, respectively, in comparison to 2019.
The Property Market in Cyprus in the Future
Property sales in Cyprus appear to be trending in the right direction, with the Cyprus property market expected to stay relatively stable in 2021. Although there may be a short-term drop in property prices, this is expected to be a temporary measure, with prices expected to increase by the end of 2021.
Despite being heavily impacted by the coronavirus epidemic, both the UK and US housing markets recovered significantly in 2021. As a result of the pent-up demand, it is expected that the Cyprus property market would follow suit.
However, it is currently impossible to predict whether the recent development would be sustained. The development comes after months of sluggish sales, and the future of the Cyprus property market is uncertain due to the continued repercussions of COVID-19. With the demand for visas now in place for individuals intending to stay in holiday homes for longer than 90 days, post-Brexit uncertainty will likely put further pressure on property sales from foreign buyers.