High-end residential property market declines slightly in Q3 - Foreign interest still on the rise

The high-end residential property market showed a slight decrease in the third quarter of 2023 compared to the same period last year, though foreign interest remains on the rise, according to Cyprus Sotheby’s International Realty’s quarterly “INSIGHTS” report.

“Since the beginning of the year, Cyprus’ 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,” said Anastasia Yianni, CEO of Cyprus Sotheby’s International Realty, commenting on the report. “The market is stabilising on the back of extremely strong performance in 2022 and first half of 2023.”

To a certain degree, said Yianni, 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.”

It is also noteworthy that foreign interest remains on the rise, she added. “Buyers from abroad actively buy property in Cyprus confirming the appeal of the island and its prospects as an international business centre, fast-growing investment destination in Europe, and safe place for life. After all, existing investors are the best ambassadors of Cyprus that help building its positive image.”

According to the Cyprus Land Registry, as of the end of September 2023, the total number of registered contracts of sales since the beginning of the year reached 11,519, showing a 20% increase year-on-year. In Q3 2023, the number of registered contracts of sales reached a total of 3,830, up 14.4% year-on-year.

The attractiveness of Cyprus among foreign buyers continues to grow

Sotheby’s report shows that the attractiveness of Cyprus among foreign buyers continues to grow. Indeed, the share of overseas sales comprised 45.9% of total property sales contracts for the last nine months. Since the beginning of the year, foreign property sales totalled 5,289, demonstrating an increase by 27.9% year-on-year driven by demand from non-EU citizens. In Q3 2023, the overseas sales increased by 13.7% to 1,712 comparing with Q3 2022.

Despite the growing number of registered contracts of sales, as evident by the transaction data presented, Cyprus' residential real estate market decreased to €2.7b during the first nine months of 2023, recording a 5.2% annual drop. The residential market actively grew throughout 2022 and first-half 2023, so the current correction was expected, the report said.

In the same period, the number of transactions on Cyprus' high-end residential property market totalled 2,820 representing an increase of 10.6% year-on-year. By value, the high-end residential property market declined slightly by 3.1% year-on-year to €1.5b. The high-end properties account for a half of the residential market (53%) with €1.5b in terms of transaction value. The decline was attributed to the results of the previous quarter.

High-end residential property market not very active in Q3

In the third quarter alone, the high-end residential property market was not very active in the last three months. The number of transactions totalled 616 with only 97 transactions with high-end houses. By value, in the last quarter, the high-end residential property market dropped by 44.6% year-on-year and fell slightly below the €300m mark.

Both segments – houses and apartments – showed a decrease year-on-year (41.2% and 46.1% respectively). In Q3 2023, the high-end apartment segment declined by volume by 32.9% year-on-year to 519 transactions and by value by 46.1% year-on-year to €197.7m.

Volume and value of transactions up in Paphos, down in Limassol

In Limassol, since the beginning of the year the number or registered transactions with high-end property reached 1,510, representing a marginal decrease of 1.5% year-on-year. By value it declined by 11.8% year-on-year. In Q3 2023, the local high-end market decreased by 41.3% year-on-year in terms of volume to 311 transactions and almost by half year-on-year in terms of value to €159.2m.

In Paphos, during nine months of 2023, the number of transactions reached 497, up 35.1% year-on-year while the value of the market grew by 14.8% year-on-year to €286.9m. In Q3 2023, the local high-end market decreased by 31.2% year-on-year by volume to 95 transactions and by 40.5% year-on-year by value to €54.4m.

In Nicosia, the high-end local market was basically stable comparing with the same period of last year, though in Q3 2023, it experienced a decline both in volume and value.

Cyprus Sotheby’s International Realty publishes the quarterly report “INSIGHTS” detailing the volume and value on Cyprus’ high-end residential real estate market. The report also provides insights into the real estate market in each district of the country. The high-end property market in the report means houses over €500,000 and apartments over €200,000.