Q2 2023 ENG

LOCAL EXPERTISE WITH A GLOBAL PERSPECTIVE

Welcome to the residential market report of Q2 2023, providing the latest data on the Cyprus real estate market.

Cyprus’s premium residential property market continues to demonstrate strong results. The first half of 2023 showed an increase both by volume and value compared to the same period of the last year. The number of transactions grew in the premium houses and apartments segments. Though there was a minor 1.9% decrease yearon-year in the premium apartment segment by value, it was offset by the results of the premium houses segment.

We see a stable demand for premium residential properties both for houses and apartments in all districts across Cyprus, with the demand supported by domestic and international buyers. We have a moderate outlook for the premium property market and expect a slightly negative trend in the short and medium term on the back of the extremely strong previous 2022 year.

Some of the factors affecting the local real estate market lay in the latest legislative initiatives. Namely, on May 2, 2023, the regulations for permanent residency by investment in Cyprus were adjusted, even though the minimum required investment amount remained at €300,000 + VAT. Also, on June 8, 2023, Cyprus Parliament passed a law on reduced VAT for first homes. The 5% reduced VAT will no longer apply to properties over €475,000 and over 190 sq.m. However, for properties with granted building permits or submitted applications for them, the old incentives still apply, which stimulated the immediate demand.

healthy ROI potential of Cyprus properties, are in force and will support the market in the long term.

Finally, we are delighted to announce our company’s remarkable achievement of winning the prestigious European Property Award in two esteemed categories - a testament to our excellence!

With gratitude,

Anastasia Yianni Chief Executive Officer

Cyprus Sotheby’s International Realty

Meanwhile, the traditional Cyprus market drivers, such as lifestyle opportunities, residency programme, and a

ABOUT INSIGHTS:

Transaction data are provided by Cyprus’ Department of Lands and Surveys, which records all transfers of ownership and registered contracts of sale (including property description, purchase price, date, etc). The data is processed in order to classify each transaction (as some properties are under construction, their description is not exact, or they form part of bigger projects) and are categorised by property type.

The analysis covers the entire area controlled by the Republic of Cyprus, excludes properties sold at auction (foreclosure), and references property values based on the amount declared by the purchaser at the time of the transaction (which excludes any VAT, transfer fees, or other duties levied).

THE REAL ESTATE MARKET

IN CYPRUS

Q2 2023

TRANSACTION VOLUME

• According to the Cyprus Land Registry, in H1 2023, the number of transactions on Cyprus highend residential property market totaled 1,757 demonstrating an increase by 12.6% year-on-year. By value, the high-end residential property market showed a minor increase by 0,7% year-onyear to €936.2mn.

• In H1 2023, the high-end houses segment grew both by value and by volume comparing with H1 2022. The number of transactions with high-end houses grew by 22% year-on-year to 338 and sales numbers increased by 6.3% year-on-year to €314.4mn.

• In H1 2023, the high-end apartment segment grew by volume by 10.5% year-on-year to 1,419 transactions, while declined by value by 1.9% year-on-year to €621.8mn.

• The transaction volume of high-end properties reached 1,757 transactions, accounting for 27% of the total number of transactions in the country. By value, in H1 2023, Cyprus residential real estate market reached € 1.7bn. The high-end properties account for a half of the total market by transaction value (54.3%) with € 936.2mn.

TRANSACTION VOLUME BY DISTRICTS

• In Limassol, in H1 2023, the high-end market increased by volume by 5.5% year-on-year to 943 transactions while declined by value by 5.5% year-on-year to € 558.4mn. The decline was attributable to the high-end apartment segment which decreased by €51mn or 10.9% year-onyear. The cosmopolitan Limassol is the king of luxury apartments and high-rise seafront towers. Meanwhile, the high-end houses segment in Limassol grew by 15.2% year-on-year to €142mn by value and by 38% year-on-year by volume.

• In Paphos, in H2 2023, the high-end market grew by 14.5% year-on-year by value to €178.2mn and by 36,4% year-on-year by volume to 311 transactions. The growth was mostly driven by the high-end apartments segment which increased by 38.3% year-on-year to €62.9mn.

• In Nicosia, in H1 2023, the high-end market was basically stable showing a minor increase both by volume and value. The strong performance in the high-end apartments segment offset the decline in the high-end houses segment.

VOLUME OF PREMIUM RESIDENTIAL PROPERTIES BY DISTRICT Q2 2022 – Q2 2023

LIMASSOL

Limassol is the business capital of Cyprus and a city of skyscrapers. Relocated international companies are the driving force behind the constant real estate growth in the city.

SINCE Q1 2016

• There have been 22,591 transactions, 7,774 of houses and 14,817 of apartments. Of these, 8,899 (39%) were at the premium end of the market.

• Total transaction value for residential properties stood at €9.496bln of which €7.022bln (74%) was for the premium end of the market.

• The overall breakdown of residential transactions across the market was 83% of houses under €500k and 49% of apartments under €200k. This apportionment has remained broadly stable throughout, indicating the attractiveness of the premium segment of the market (particularly for apartments).

Residential transactions totaled 786 in Q2 2023, of which 50% (396 properties) were in the premium segment of the market.

Premium residential properties are of particularly high demand in Limassol, indicated by the high percentage of houses (65 properties, 45% of the total for Cyprus) and apartments (331 properties, 53% of the total for Cyprus) transacted over the past quarter.

Since Q2 2022, the transaction value of residential properties totaled €2.1bln, of which €1.6bln (76%) was for the premium end of the market. It is worth noting that €1.2bln is related to apartments, as this is the main premium product of the district.

The median transaction price for premium houses was €700k and €325k for apartments in Q2 2023. Compared to Q2 2022, median prices of houses and apartments decreased by 20%, and by 12.2% respectively.

KEY INDICATORS

2023

VOLUME

AND MEDIAN

PRICES

OF PREMIUM HOUSES AND APARTMENTS

TRANSACTIONS’ PRICE DISTRIBUTION

PAFOS

Pafos is the cultural capital of the island, a city of villas and low-rise buildings, It has traditionally been popular with foreign buyers.

SINCE Q1 2016

• There have been 17,631 transactions, 8,530 of houses and 9,101 of apartments. Of these, 3,013 (17%) were at the premium end of the market showing the district’s appeal as a destination for more affluent buyers.

• Total transaction value for residential properties stood at €4.857bln of which €2.596bln (53%) was for the premium end of the market.

Residential transactions totalled 573 in Q2 2023, of which 23% (129 properties) were of the premium segment of the market.

Premium residential properties are of particularly high demand in Paphos, indicated by the high percentage of houses (51 properties, 35% of the total for Cyprus) and apartments (78 properties, 13% of the total for Cyprus) transacted over the past quarter.

Since Q2 2022, transaction value of residential properties totalled €1.046bl, of which €489m (47%) was for the premium end of the market. It’s worth noting that €333m related to houses, as this in the main premium product of the district.

The median transaction price for premium houses was €750k and €303k for apartments in Q2 2023. Compared to Q2 2022, median prices of houses decreased by 8%, and increased by 1% for apartments.

KEY INDICATORS

2023

• The overall breakdown of residential transactions across the market was 78% of houses under €500k and 84% of apartments under €200k. This apportionment has remained broadly stable throughout, indicating the attractiveness of the premium segment of the market (particularly for houses).

VOLUME AND MEDIAN PRICES OF PREMIUM HOUSES AND APARTMENTS

TRANSACTIONS’ PRICE DISTRIBUTION

NICOSIA

Nicosia, the capital of Cyprus, is a unique and attractive place. Commercial and long-term rental properties drive the market here.

SINCE Q1 2016

• There have been 19,685 transactions, 5,220 of houses and 14,465 of apartments. Of these, 2,597 (13%) were at the premium end of the market.

• Total transaction value for residential properties stood at €3.477bln of which €1.084bln (31%) was for the premium end of the market.

• The overall breakdown of residential transactions across the market was 94% of houses under €500k and 84% of apartments under €200k. This apportionment has remained broadly stable throughout, indicating the attractiveness of the premium end of the market (particularly for apartments).

Residential transactions totalled 771 in Q2 2023, of which 19% (150 properties) were of the premium segment of the market.

Premium residential properties are of particularly medium demand in Nicosia, indicated by the percentage of houses (13 properties, 9% of the total for Cyprus) and apartments (137 properties, 22% of the total for Cyprus) transacted over the past quarter.

Since Q2 2022, transaction value of residential properties totalled €805m, of which €270m (34%) was for the premium end of the market. It is worth noting that €208m related to apartments, as this is the main premium product of the district.

The median transaction price for premium houses was €810k and €260k for apartments in Q2 2023.

Compared to Q2 2022, median prices of houses and apartments increased by almost 26.6% and 4.0% respectively.

KEY INDICATORS

2023

VOLUME AND MEDIAN PRICES OF PREMIUM HOUSES AND APARTMENTS

TRANSACTIONS’ PRICE DISTRIBUTION

800

LARNACA

Larnaca is one of the oldest cities in Cyprus with lots of history and class, yet the recent years’ development gave it a modern sparkle, and the best is yet to come.

SINCE Q1 2016

• There have been 14,950 transactions, 4,777 of houses and 10,173 of apartments. Of these, 1,630 (11%) were at the premium end of the market.

• Total transaction value for residential properties stood at €2.592bln of which €861m (33%) were for the premium end of the market.

• The overall breakdown of residential transactions across the market was 94% of houses under €500k and 87% of apartments under €200k. This apportionment has remained broadly stable throughout, indicating the attractiveness of the premium segment of the market (particularly for high-end apartments).

Residential transactions totalled 669 in Q2 2023, of which only 12% (79 properties) were of the premium segment of the market.

Premium residential properties are of low demand in Larnaca, indicated by the percentage of houses (12 properties, 8% of the total for Cyprus) and apartments (67 properties, 11% of the total for Cyprus) transacted over the past quarter.

Since Q2 2022, transaction value of residential properties totalled €613m, of which €161m (26%) was for the premium segment of the market. It is worth noting that €112m related to apartments, as this is the main premium product of the district.

The median transaction price for premium houses was €597.5k and for apartments €255k, in Q2 2023.

Compared to Q2 2022, median prices of houses decreased by 4.4%, while for apartments by 15%.

KEY INDICATORS

2023

VOLUME AND MEDIAN PRICES OF PREMIUM HOUSES AND APARTMENTS

TRANSACTIONS’ PRICE DISTRIBUTION

FAMAGUSTA

APARTMENT PRICES REMAINED STABLE

The Eastern part of Cyprus is a famous tourist destination. With the vibrant Ayia Napa and quiet Protaras, this area offers mostly holiday oriented properties.

SINCE Q1 2016

• There have been 5,082 transactions, 2,443 of houses and 2,639 of apartments. Of these, 551 (11%) were at the premium end of the market.

• Total transaction value for residential properties stood at €1.261bln of which €534m (42%) was for the premium end of the market.

• The overall breakdown of residential transactions across the market was 87% of houses under €500k and 91% of apartments under €200k. This apportionment has remained broadly stable throughout, indicating the attractiveness of the premium segment of the market (particularly for high-end apartments).

Residential transactions totaled 165 in Q2 2023, of which 8% (14 properties) were in the premium segment of the market.

Premium residential properties are of particularly low demand in Famagusta, indicated by the low percentage of houses (3 properties, only 2% of the total for Cyprus) and apartments (11 properties, only 2% of the total for Cyprus) transacted over the past quarter.

Since Q2 2022, the transaction value of residential properties totaled €214m, of which €55m (26%) was for the premium end of the market. It is worth noting that €37m is related to houses, as this is the main premium product of the district.

The median transaction price for premium houses was €730k and €246.4k for apartments in Q2 2023.

Compared to Q2 2022, median prices of houses increased by almost 1% and decreased by 24% for apartments.

KEY INDICATORS

2023

VOLUME AND MEDIAN PRICES OF PREMIUM HOUSES AND APARTMENTS

TRANSACTIONS’ PRICE DISTRIBUTION

© 2023 Cyprus Sotheby’s International Realty. All rights reserved. Cyprus Sotheby’s International Realty® and the Sotheby’s International Realty Logo are service marks licensed to Sotheby’s International Realty Affiliates LLC and used with permission. ONE Sotheby’s International Realty fully supports the principles of the Fair Housing Act and the Equal Opportunity Act. Each franchise is independently owned and operated. Any services or products provided by independently owned and operated franchisees are not provided by, affiliated with or related to Sotheby’s International Realty Affiliates LLC nor any of its affiliated companies. The information contained herein is deemed accurate but not guaranteed.

Data provided by Cyprus’ Department of Lands and Surveys; data processing and analysis carried out by WiRE (Wire Services Ltd, Wire Wind Ltd, and Wire Valuations LLC, collectively WiRE). Cyprus Sotheby’s International Realty and WiRE make no representations or warranties concerning the report or the content and disclaim all such representations and warranties as to the condition, quality, accuracy, suitability, fitness for purpose, or completeness. Nothing in this report shall be regarded as providing financial advice, and you acknowledge that the content of this presentation is not suitable for this purpose. Neither Cyprus Sotheby’s International Realty or WiRE nor any of their directors, employees, or other representatives will be liable for damages arising from or in connection with the use of this report. This is a comprehensive limitation of liability that applies to all damages of any kind, including (without limitation) compensatory, direct, indirect, or consequential damages, loss of data, income or profit, loss of or property damage, and claims of third parties. All material in this report is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing in this report constitutes professional and/or financial advice, nor does any information include a comprehensive or complete statement of the matters discussed or the law relating thereto. Information in this report may not be accurate or current. In particular (but without limitation), information may be rendered inaccurate by changes in applicable laws and other regulations. No action should be taken or omitted to be taken in reliance upon data in this report.