The profile of a foreign buyer: Why they choose Cyprus and their favourite towns

The foreign nationals expressing interest in Cyprus in 2023 mainly comprised high-income investors and developers, with a growing focus on residential and commercial properties.

There was a shift toward Larnaca and Paphos, at the expense of Limassol – though the latter is still a key destination due to its cosmopolitan lifestyle and business friendly ecosystem. And there was a significant inflow of Israeli investors and developers showing interest in both residential and commercial RE around the island.

This is according to a report by EY Cyprus – “Industry Semi Annual Update: Cyprus Real Estate” – which said the investors cite safety as a key factor driving their interest in Cyprus. In Limassol, middle- to high-income investors were drawn, while Larnaca attracted mostly those with lower income. Larnaca also continues to be popular with Lebanese and other Middle Eastern investors and developers.

The report also found there was a substantial inflow of Russian investors with higher social standing to Limassol. Many young Russians are relocating to Cyprus due to safety reasons and ease of doing business. This trend was also observed among investors from Ukraine and Belarus, who also showed a preference for Limassol. They primarily targeted residential properties for personal use, as well as offices for headquartering reasons.

The following graph presents the perception of participants who identified investors from the nationalities listed below.

As it shows, the majority of investors came from Israel (55%), followed by Russia (27%), Lebanon and Ukraine (27%), Saudi Arabia (9%), Central Europe (9%) and Belarus (9%).

One third of key stakeholders think security is main attraction

In a pulse survey carried out as part of the report, EY Cyprus asked key industry stakeholders: “With respect to foreign buyers, what has been the main reason for buying property in Cyprus during the past two years?”

More than one-third of participants said they felt that foreign buyers were motivated by security reasons, largely influenced by the war in Ukraine and geopolitical tensions or unrest in the region. Another 21% of stakeholders attributed the investments to Cyprus’ residency and visa schemes. Additionally, 21% of respondents cite other factors such as headquartering.

Around 14% of participants feel that investors are exclusively seeking investment opportunities, finding Cyprus attractive for potential returns. Lastly, 7% attributed the investments to lifestyle choices, including retirement and holiday homes, suggesting that the island’s appealing lifestyle also plays a role in attracting foreign property buyers.

Expectations for next six months

Asked how they expect foreign investor numbers to change over the next six months, 45% said they are not expecting any changes, while 36% expect an increase. The prediction of no change might be due to a perceived market saturation and stable demand, said EY Cyprus in its analysis. A minority 18% expect a decrease and attribute it mainly to the high interest rates and global uncertainty.