Q4 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

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

TRANSACTION VOLUME

• Across Cyprus, quarter-on-quarter (Q3 2023 – Q4 2023) transaction volume of houses decreased by 14% (to less than 0.1K) and by 25% (to less than 1.8k) for apartments. Year-on-year (Q4 2022 – Q4 2023) transaction volume of houses decreased by 33% and by 34% for apartments.

• Quarter-on-quarter transaction volume of high-end houses (>€500k) decreased by 23% (to 112) and by 35% (to 525) for high-end apartments (>€200k). Year-on-year (Q4 2022 – Q4 2023) transaction volume of high-end houses decreased by almost 43% and by 44% for high-end apartments.

• Paphos’s year-on-year transaction volume of houses and apartments decreased by 47% (to 228) and 58% (212) respectively.

• Paphos’s quarter-on-quarter transaction volume for houses decreased by 30% and (to 228) and 44% (to 212) decrease in apartment transactions.

PRICES

• Across Cyprus, median prices of houses and apartments decreased in Q4 2023, compared to Q3 2023, at €232k for houses and €150k for apartments. Moreover, year-on-year (Q4 2022 – Q4 2023) median prices decrease by 11% for houses and 5% for apartments.

• Quarter-on-quarter median prices of premium houses (>€500k) decrease by 5% (to €740k) and increase 3% (to €300k) for high-end apartments (>€200k). Year-on-year (Q4 2022 – Q4 2023) median prices decrease by 3% for high-end houses and by 3% for high-end apartments.

OUTLOOK

• The declining trend in prices is expected to reach a point of stabilization in the near future.

• The ongoing conflict between Russia-Ukraine, as well as the persistent geopolitical risk premium associated with Israel-Palestinian war, continue to have an impact on energy prices, causing them to rise. This, in turn, is expected to subsequently affect the construction prices once again.

• Escalating interest rates and rising prices will undoubtedly exert an impact on both the demand of residential properties.

VOLUME OF PREMIUM HOUSES & APARTMENTS

VOLUME OF PREMIUM RESIDENTIAL PROPERTIES BY DISTRICT

Limassol Pafos

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.

Residential transactions totalled 700 in Q4 2023, of which 46% (322 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 (41 properties, 37% of the total for Cyprus) and apartments (281 properties, 54% of the total for Cyprus) transacted over the past quarter.

Since Q4 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 €1.25bln related to apartments, as this is the main premium product of the district.

The median transaction price for premium houses was €800k and €313k for apartments in Q4 2023. Compared to Q4 2022, median prices of houses remained almost staple and for apartment decreased by 10.7%.

KEY INDICATORS

• There have been 26,158 transactions, 8,510 of houses and 17,648 of apartments. Of these, 10,968 (42%) were at the premium end of the market.

• Total transaction value for residential properties stood at €10,6bln of which €7,9bln (75%) was for the premium end of the market.

• The overall breakdown of residential transactions across the market was 83% of houses under €500k and 46% of apartments under €200k. This apportionment has remained broadly stable throughout, indicating the attractiveness of the premium segment of the market (particularly for apartments).

VOLUME AND MEDIAN PRICES OF

PREMIUM HOUSES AND APARTMENTS

TRANSACTIONS’ PRICE DISTRIBUTION

Apartments

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.

Residential transactions totalled 440 in Q4 2023, of which 20% (87 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 (37 properties, 33% of the total for Cyprus) and apartments (50 properties, 10% of the total for Cyprus) transacted over the past quarter.

Since Q4 2022, transaction value of residential properties totalled €1.064bl, of which €508m (48%) was for the premium end of the market. It’s worth noting that €320m related to houses, as this in the main premium product of the district.

The median transaction price for premium houses was €700k and €325k for apartments in Q4 2023. Compared to Q4 2022, median prices of houses decreased by 3%, and increased by 7% for apartments.

KEY INDICATORS

2023

• There have been 19,623 transactions, 9,408 of houses and 10,215 of apartments. Of these, 3,435 (18%) 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 €5.4bln of which €2.9bln (54%) was for the premium end of the market.

• The overall breakdown of residential transactions across the market was 82% of houses under €500k and 83% 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

Transaction Volume of > €

Apartments

Transaction Volume of

Houses

Median Prices of > € 200k Apartments

Houses

NICOSIA

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

Residential transactions totalled 803 in Q4 2023, of which 16% (127 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 (15 properties, 13% of the total for Cyprus) and apartments (112 properties, 21% of the total for Cyprus) transacted over the past quarter.

Since Q4 2022, transaction value of residential properties totalled €808m, of which €279m (35%) was for the premium end of the market. It is worth noting that €213m related to apartments, as this is the main premium product of the district.

The median transaction price for premium houses was €715k and €269k for apartments in Q4 2023. Compared to Q4 2022, median prices decreased by almost 36.7% of houses and increased by 8.2% for apartments.

KEY INDICATORS

2023

• There have been 21,725 transactions, 5,749 of houses and 15,976 of apartments. Of these, 2,981 (14%) were at the premium end of the market.

• Total transaction value for residential properties stood at €3,9bln of which €1,2bln (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).

VOLUME AND MEDIAN PRICES

HOUSES AND APARTMENTS

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.

Residential transactions totalled 617 in Q4 2023, of which only 14% (88 properties) were of the premium segment of the market.

Premium residential properties are considered to be of low demand in Larnaca, indicated by the percentage of houses (14 properties, 13% of the total for Cyprus) and apartments (74 properties, 14% of the total for Cyprus) transacted over the past quarter.

Since Q4 2022, transaction value of residential properties totalled €706m, of which €203m (29%) was for the premium segment of the market. It is worth noting that €141m related to apartments, as this is the main premium product of the district.

The median transaction price for premium houses was €995k and for apartments €251k, in Q4 2023. Compared to Q4 2022, median prices of houses increased by 24.4%, while for apartments decreased by 16%.

KEY INDICATORS

2023

• There have been 16,986 transactions, 5,350 of houses and 11,636 of apartments. Of these, 1,946 (11%) were at the premium end of the market.

• Total transaction value for residential properties stood at €2.97bln of which €982m (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).

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.

Residential transactions totalled 198 in Q4 2023, of which 7% (13 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 (5 properties, only 7% of the total for Cyprus) and apartments (8 properties, only 2% of the total for Cyprus) transacted over the past quarter.

Since Q4 2022, transaction value of residential properties totalled €234m, of which €66m (28%) was for the premium end of the market. It is worth noting that €43m related to houses, as this is the main premium product of the district.

The median transaction price for premium houses was €725k and €223k for apartments in Q4 2023. Compared to Q4 2022, median prices of houses and apartments decreased by 8% and 54% respectively.

KEY INDICATORS

2023

• There have been 5,772 transactions, 2,782 of houses and 2,990 of apartments. Of these, 644 (11%) were at the premium end of the market.

• Total transaction value for residential properties stood at €1.44bln of which €609m (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 90% 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).

VOLUME AND MEDIAN PRICES

OF PREMIUM HOUSES AND APARTMENTS

TRANSACTIONS’ PRICE DISTRIBUTION

Transaction Volume of > € 200k Apartments

Transaction Volume of > € 500k Houses

Median Prices of > € 200k Apartments

Median Prices of > € 500k Houses

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

Registration No.: 1013 | License No.: 517/E.

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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.