Q3 2023 ENG

LOCAL EXPERTISE WITH A GLOBAL PERSPECTIVE

Welcome to the quarterly residential market report of the third quarter of 2023, providing the latest data on the Cyprus real estate market in the reporting period.

Cyprus’s high-end residential property market showed a slight decrease both in terms of volume and value compared with the same period of the last year. The market is stabilizing itself on the back of extremely strong performance in 2022 and first half of 2023. To a certain degree, this is influenced by the latest legislative initiatives: the adjusted regulations for permanent residency by investment in Cyprus and a new law on reduced VAT for first homes. However, we expect the demand to remain quite strong.

Despite occasional fluctuations, the real estate sector, especially its premium end, over the decades has proved to be particularly resilient and a good investment field in our challenging times. As for our company updates, in October Cyprus Sotheby’s International Realty marked a significant four-year milestone of operating in Cyprus.

We have become one of the country’s leading real estate agencies with international recognition. Our team of 30 dedicated professionals acts as ambassadors of the Cyprus lifestyle.

We believe in the stable and sustainable growth of our island, its attractive business environment, and excellent opportunities for life, which will support the local property market going forward.

With gratitude,

Anastasia Yianni Chief Executive Officer Cyprus

Sotheby’s International Realty

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

TRANSACTION VOLUME FOR HOUSES & APARTMENTS Q3 2023

TRANSACTION VOLUME

• Across Cyprus, quarter-on-quarter (Q2 2023 – Q3 2023) transaction volume of houses decreased by 41% (to 0.1K) and by 38% (to 1.8k) for apartments. Year-on-year (Q3 2022 – Q3 2023) transaction volume of houses decreased by 34% and by 30% for apartments.

• Quarter-on-quarter transaction volume of high-end houses (>€500k) decreased by 53% (to 97) and by 45% (to 519) for high-end apartments (>€200k). Year-on-year (Q3 2022 – Q3 2023) transaction volume of high-end houses decreased by almost 32% and by 33% for high-end apartments.

• Famagusta’s year-on-year transaction volume of houses decreased by 53% (to 52) and Limassol by 43% (to 423) for apartments.

• Famagusta’s quarter-on-quarter transaction volume for houses decreased by 59% (to 52). Paphos was next in line with a 51% (to 222) decrease for houses transactions and 56% (to 247) decrease in apartment transactions.

VOLUME OF PREMIUM HOUSES & APARTMENTS

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 Pafos, in H1 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 highend 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 Q3 2022 – Q3 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 24,972 transactions, 8,161 of houses and 16,811 of apartments. Of these, 10,361 (42%) were at the premium end of the market.

• Total transaction value for residential properties stood at €10,123bln of which €7,520bln (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 47% 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 totalled 642 in Q3 2023, of which 49% (311 properties) were of the premium segment of the market.

Premium residential properties are of particularly high demand in Limassol, indicated by the high percentage of houses (38 properties, 39% of the total for Cyprus) and apartments (273 properties, 53% of the total for Cyprus) transacted over the past quarter.

Since Q3 2022, transaction value of residential properties totalled €2.15bln, of which €1.6bln (76%) was for the premium end of the market. It is worth noting that €1.27bln related to apartments, as this is the main premium product of the district.

The median transaction price for premium houses was €780k and €320k for apartments in Q3 2023. Compared to Q3 2022, median prices of houses and for apartment decreased by 8.2%, and by 8.6% 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 18,774 transactions, 9,041 of houses and 9,733 of apartments. Of these, 3,271 (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 €5.190bln of which €2.780bln (54%) was for the premium end of the market.

Residential transactions totalled 469 in Q3 2023, of which 20% (95 properties) were of the premium segment of the market.

Premium residential properties are of particularly high demand in Pafos, indicated by the high percentage of houses (35 properties, 36% of the total for Cyprus) and apartments (60 properties, 12% of the total for Cyprus) transacted over the past quarter.

Since Q3 2022, transaction value of residential properties totalled €1.077bl, of which €505m (47%) was for the premium end of the market. It’s worth noting that €328m related to houses, as this in the main premium product of the district.

The median transaction price for premium houses was €870k and €310k for apartments in Q3 2023. Compared to Q3 2022, median prices of houses increased by 23%, and by 3% for apartments.

• The overall breakdown of residential transactions across the market was 82% 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

KEY INDICATORS 2023

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 20,674 transactions, 5,494 of houses and 15,180 of apartments. Of these, 2,794 (14%) were at the premium end of the market.

• Total transaction value for residential properties stood at €3,690bln of which €1,155bln (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 671 in Q3 2023, of which 16% (106 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 (8 properties, 8% of the total for Cyprus) and apartments (98 properties, 19% of the total for Cyprus) transacted over the past quarter.

Since Q3 2022, transaction value of residential properties totalled €772m, of which €259m (34%) was for the premium end of the market. It is worth noting that €201m related to apartments, as this is the main premium product of the district.

The median transaction price for premium houses was €778k and €254k for apartments in Q3 2023. Compared to Q3 2022, median prices increased by almost 14.4% of houses and decreased by 0.4% for apartments.

KEY INDICATORS

VOLUME AND MEDIAN PRICES OF PREMIUM HOUSES AND APARTMENTS

TRANSACTIONS’ PRICE DISTRIBUTION

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 16,108 transactions, 5,090 of houses and 11,018 of apartments. Of these, 1,833 (11%) were at the premium end of the market.

• Total transaction value for residential properties stood at €2.815bln of which €930m (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 86% 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

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 5,498 transactions, 2,639 of houses and 2,859 of apartments. Of these, 610 (11%) were at the premium end of the market.

• Total transaction value for residential properties stood at €1.369bln of which €580m (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 houses).

Residential transactions totalled 144 in Q3 2023, of which 12% (17 properties) were of the premium segment of the market.

Premium residential properties are of particularly low demand in Famagusta, indicated by the low percentage of houses (7 properties, only 7% of the total for Cyprus) and apartments (10 properties, only 2% of the total for Cyprus) transacted over the past quarter.

Since Q3 2022, transaction value of residential properties totalled €231m, of which €66m (29%) was for the premium end of the market. It is worth noting that €44m related to houses, as this is the main premium product of the district.

The median transaction price for premium houses was €610k and €248.5k for apartments in Q3 2023.

Compared to Q3 2022, median prices of houses and apartments decreased by 11% and 8% respectively.

KEY INDICATORS

2023

VOLUME AND MEDIAN PRICES OF PREMIUM HOUSES AND APARTMENTS

TRANSACTIONS’ PRICE DISTRIBUTION

Two Bedroom Luxury House in Minthis Golf Resort

This lovely two-bedroom villa with breathtaking views of the mountains, greets you with a generously proportioned flowing open-plan layout living space featuring a dining area and two bedrooms, all filled with natural light through floor-toceiling windows.

The villa has expansive verandas that add to the overall tranquility and create cozy shaded areas for outdoor entertaining.

€ 850.000 + VAT

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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.