The Citizenship by Investment program in Cyprus is no longer working, but there are still enough bonuses for real estate investors on this island. Alexander Styranovsky, a representative of Cybarco Developments Ltd, told us more about this. The expert also shared with us information about where the cheapest real estate in Cyprus is for sale, what prices are currently set for the purchase of housing and rent, and approximately how much you can earn on real estate in this sunny country.
Recently, the demand for short-term rentals has increased significantly.
Latest news and popular properties on the Cyprus market
— From the latest news on the Cyprus real estate market, I can note:
- The rise in real estate prices. Property prices in Cyprus have increased during 2023, especially in popular tourist areas such as Limassol and Paphos. In the first quarter of 2024, the average price per square meter was 2,426 euros, which is 7.3% more than in the first quarter of 2023.
- Mortgage interest rates are rising, as in many other countries. Currently, the average mortgage interest rate in Cyprus is about 3.5-4.5%. However, the actual rate that the borrower will pay may vary depending on factors such as credit history, mortgage amount and loan term.
- Increased demand for short-term rentals. The rise of tourism has led to an increase in demand for short-term rentals, which has led to an increase in prices for apartments and villas in popular locations. Platforms like Airbnb and Booking.com They are in high demand, which leads to an increase in the flow of investments into this sector.
Speaking of demand, I would like to note that it has also increased in the segment of long-term rental of real estate, especially in popular tourist and urban areas. This is due to the large number of expats who come to Cyprus to work or study.
Residential real estate has also been very popular in the last few years. This is due to population growth, immigration and interest from foreign buyers.
Real estate objects in high demand:
- Affordable housing. Apartments and houses at affordable prices are in great demand from locals and foreigners with limited budgets. The Government of Cyprus offers housing subsidy schemes to support low-income buyers.
- Luxury real estate. Luxury apartments, villas and penthouses are attracting growing interest from wealthy citizens and investors. These facilities offer a high level of comfort, exclusive amenities and a prestigious location.
- Real estate in coastal areas, which include, for example, Limassol and Paphos. They attract buyers with their picturesque location, sandy beaches and tourist attractions.
- Real estate for short-term rent. Investors and property owners are increasingly investing in properties suitable for short-term rentals due to high demand and income potential.
It is important to say that despite the high demand, the problem of the Cypriot market is the limited supply of housing — this leads to competition and further price increases.
Property prices in Cyprus have increased by an average of 10% over the past year.
Sales volumes and cost of housing in different cities of Cyprus
— According to the Department of Land and Topographical Research of Cyprus, a total of 17,689 residential real estate units were sold in Cyprus in 2023, which is 22.5% more than in 2022.
Distribution of sales by quarter:
- First quarter: 3712
- Second quarter: 4317
- Third quarter: 4727
- Fourth quarter: 4933
By type of property:
- Apartments and apartments: 12,733
- Houses: 4956
By districts:
How to buy a property in Cyprus
— Property prices in Cyprus continue to rise, although at a more moderate pace than in previous years. According to the Department of Land and Topographical Research of Cyprus, in the first quarter of 2023, the average price of residential real estate amounted to 2,426 euros/m2, which is 7.3% more than in the first quarter of 2022.
I will give specific examples of prices for apartments and houses in major cities of Cyprus:
Apartments:
- Nicosia: 2100-3500 euros/m2
- Larnaca: 1800-2800 euros/m2
- Limassol: 2500-4000 euros/m2
- Paphos: 2000-3200 euros/m2
- Famagusta: 1600-2500 euros/m2
At home:
- Nicosia: 2500-4000 euros/m2
- Larnaca: 2000-3000 euros/m2
- Limassol: 3000-5000 euros/m2
- Paphos: 2200-3500 euros/m2
- Famagusta: 1800-2800 euros/m2
Property prices in Cyprus have increased by an average of 10% over the past year.
It should be noted that the figures given are average, and the actual price may vary depending on factors such as location, size, age and condition of the facility.
The cheapest housing in Cyprus is for sale in the following areas:
- Famagusta: the average price for residential real estate is about 1600-2500 euros/m2.
- Larnaca — about 1800-2800 euros/m2.
- Paphos (suburban areas) — about 2000-3000 euros/m2.
The most expensive housing in Cyprus is for sale in the following areas:
- Limassol (city center and coastal areas): the average price for residential real estate is about 3000-5000 euros/m2.
- Nicosia (city center and prestigious areas) — about 2500-4000 euros/m2.
- Paphos (coastal areas) — about 2500-3800 euros/m2.
The cost of utility bills in Cyprus may vary depending on the size and type of housing, as well as on the region. On average, the following expenses can be expected monthly:
- Electricity: 50-150 euros
- Water: 20-50 euros
- Garbage: 10-20 euros
- Internet: 20-50 euros
It is no longer possible to obtain citizenship by investment, but permanent residence is still possible.
The attractiveness of the Cyprus real estate market for investors
— According to the Department of Land and Topographical Research of Cyprus, foreigners most often buy real estate in Cyprus:
- Russians
- the Chinese
- Lebanese
- the British
- Ukrainians
- The Israelis
The most popular regions for buying a home among foreigners are Limassol, Paphos, Larnaca, Famagusta.
Despite the recent cancellation of the Citizenship by Investment program, the Cypriot real estate market is still attractive to investors for the following reasons:
- Favorable taxation, including low real estate tax and no capital gains tax for individuals living outside the island.
- High rental income. Cyprus is a popular tourist destination, which creates opportunities for high income from renting real estate.
- Relatively affordable real estate prices compared to other European countries.
In addition to the above, the Government of Cyprus offers a number of bonuses for investors in Cypriot real estate, including:
- Reduced VAT rate for new buildings. Investors buying new buildings are entitled to a reduced VAT rate of 5%.
- Inheritance tax benefits. Spouses and children inheriting real estate in Cyprus are exempt from inheritance tax.
- The possibility of obtaining a residence permit through real estate investments. Foreign buyers of real estate in the amount of 300,000 euros or more can apply for a permanent residence permit in Cyprus.
Other advantages include a favorable Mediterranean climate with long hot summers and mild winters, beautiful sandy beaches, low crime rates and widespread English.
— There are several ways to make money on real estate in Cyprus:
- Renting out. Rental income averages 5-8% of the property value per year.
- Resale of real estate. Capital gains may vary depending on market conditions, but on average investors can expect to make a profit of 5-10% per year.
- Real Estate Development*: The profit from real estate development may be higher, but it also involves a lot of risk. Investors can expect a return of 10-20% per year.
- Shared ownership of real estate. Income depends on the share of ownership and the type of real estate.
* Real estate development includes the following stages: purchase of plots, preparation of a business plan and detailed layouts, organization of financing, design, construction, sale or lease of the developed real estate.
I would like to note that it is always important to weigh the risks and remember that any real estate market can be unstable and there are no absolute guarantees of profit.
Author
Yulia Yanukovych Editor-in-Chief
I am responsible for the work of the editorial office. I write expert interviews and guides.
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