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An outline of the real estate sector in Cyprus – Apartments are the driving force

The land and real estate development sector has always been of vital importance to the Cypriot economy and, during difficult times, has managed to prove its resilience and strength.

It has been proven that wars, pandemics, and even the abolition of the Cyprus Investment Programme, have not affected the market.

A report by Danos International Property Consultants & Valuers has outlined the property sector in Cyprus, with data for the second half of 2023.

An important point made in the report is that apartments are the driving force of the market, as within 2023 apartment sales increased significantly. Also, Nicosia and Famagusta saw an increase in property values, unlike the rest of the districts.

Residential properties

In terms of residential real estate, the housing market in Cyprus continues to grow amid an increase in property sales due to strong domestic demand, coupled with the return of foreign investors.

On the other hand, in the district of Limassol there was a significant decrease. In particular, the value of properties sold in Limassol decreased by €200 million compared to the first quarter, reflecting the significant decrease in sales volume.

Regarding the districts of Paphos and Larnaca, there was a decline in the real estate market during the second quarter. Paphos showed the most significant decrease, both in value and volume of sales compared to the previous quarter, while in Larnaca the volume of transactions increased but their value was slightly lower.

Undoubtedly, as Danos' figures and report show, the driving force behind the market is apartments, with 9,000 transactions involving this type of property taking place during the year, registering an annual increase of 29%.

This demand appears due to the increased interest of foreign companies in relocating to Cyprus, bringing both their activities and their staff to mainly in coastal cities.

Commercial real estate and office space

Buying commercial real estate for investment purposes in Cyprus is an attractive prospect.

Many companies, including global giants, choose to set up their offices in Cyprus for various reasons, mainly for the way of life in the country, its strategic location and the advantages of the tax system.

However, many commercial buildings on the island are outdated and the arrival of companies creates the need for new, modern buildings.

A big advantage for investing in commercial and office space is that the value of these properties increases faster compared to residential properties.

The expensiveness of Limassol and the continued increase in the prices of all types of real estate (apartment prices last year saw an increase of 8%), has led to investors turning to smaller cities.

However, it undoubtedly retains the greatest interest for foreign investors, as it is a shipping centre.

Larnaca, as the new emerging investment centre of Cyprus, has seen major developments in recent times, including the shopping centre, but also other developments that are on track for implementation.

Nicosia, as the capital of Cyprus, is best known for commercial real estate investment due to its work-oriented character, while demand for offices is predicted to increase.

(Source: InBusinessNews)

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