PwC Cyprus: The Real Estate sector proved remarkably resilient in 2023

The Cypriot real estate market demonstrated remarkable resilience and flexibility during 2023, with the total value of transactions remaining around the same levels of the previous year at €5.5b – according to PwC Cyprus’ annual report on the Cypriot real estate market.

Notably, transactions in the district of Larnaca recorded a 22% increase in transaction value terms with the district of Paphos recording a 4% y-o-y increase. The growth observed in these two districts appears to have offset the reduced transaction activity observed in the district of Limassol.

PwC Cyprus presented its report at an event titled “Evolving landscape and the need for new policies and reforms” on 29 February at its Experience Centre in Nicosia.

It was held in the presence of the Minister of Interior, Constantinos Ioannou, who also delivered a presentation on the recently introduced housing policy, as well as other policies and reforms that are currently being considered.

Following the presentation of the annual report’s key findings, a panel discussion ensued with the participation of Miltos Michaelas, CEO of Alpha Bank Cyprus, Yiannis Misirlis, Chairman of the Cyprus Land and Building Developers Association, and Dmitry Letov, Construction General Manager at Exness. The panel discussion was moderated by Constantinos Savvides, Director of Deals, Real Estate Advisory Services at PwC Cyprus.

In other findings in PwC Cyprus’ report:

Residential real estate leads the market

During 2023, the transaction value of the residential property sector reached approximately €3.9b, representing a 1% decrease compared to 2022. From the 14,600 total transactions, 9,600 related to apartment sales and 5,000 related to houses. The residential property sector accounted for 69% (70% in 2022) of the total value of transactions across the sector. The performance of the sector was fuelled by a surging activity in the land segment, as transactions of land demonstrated an annual increase of 11% (2023: €1.3b).

PwC Cyprus Director and expert Ioanna Charalambous analyses the Cyprus real estate market for 2023

Foreign buyers continue to drive the market

A total of 6,900 properties across Cyprus were acquired by foreign buyers during 2023, recording an annual increase of 16% (2022: 5,928). The observed increase is coherent with the continued influx of foreign choosing to relocate their headquarters and staff to Cyprus. It is evident that the number of properties acquired by foreigners outnumbered each respective month of 2022 with the exception of November and December 2023, which experienced decreases of 16% and 18% respectively, which appears to be largely attributable to the outbreak of the Israel-Hamas war in early October.

Plummeting demand for high-end residential properties

The high-end residential property segment recorded a notable drop in 2023, with the analysis of transaction data of single residential properties with a price of ≥€1.5m, indicating a decrease of 26% compared to 2022.

The data suggests that during 2023, a total of 164 transactions were recorded in this segment, with the total value reaching €440m. The contribution of this segment to the total value of transactions stood at merely 8%.

Regarding PwC’s report, Philippos Soseilos, CEO of PwC Cyprus, commented: “The real estate sector in Cyprus is expected to play a significant role in the new economic model of our country, as encapsulated by Cyprus’ Vision 2035. The sector is going through its own transformation journey, with stakeholders recognising the need to continuously reinvent themselves, and change how they create, deliver and capture economic value - value that will enable Cyprus to continue attracting foreign direct investments - value that is sustainable and fit for the ongoing, as well as future needs of our country.”

To view PwC Cyprus’ report for the Cypriot real estate market press here

(Main photo: Miltos Michaelas, Yiannis Misirlis, Dmitry Letov and Constantinos Savvides)