Cyprus Property On The Up

Prices of residential properties continue to climb during the first quarter of 2020, despite a dip in demand for high-end properties from foreign buyers as a result of tightened eligibility criteria in the citizenship-by-investment scheme, the Central Bank of Cyprus confirms.

In its latest Residential Property Price Index bulletin, year-on-year apartment prices increased by 4.3%, houses by 2.3%.

The CBC identify two reasons for apartments taking the lead. Rising demand up until the reporting period was driven by foreign nationals seeking Cypriot citizenship or permanent residence, with a spike in bills of sale recorded in the final quarter of last year.

An insufficient stock of residential apartment units sought by growing numbers of students (local and foreign) as well as foreign workers has also fuelled demand and subsequent price uplift.

Year-on-year, flat prices rose the most in Larnaca (9.4%) and Limassol (7.2%), followed by Famagusta (5.3%), Paphos (2.2%) and Nicosia (1.9%).
For houses, the greatest price hikes were observed in Limassol (4.5%), Paphos (1.8%) and Nicosia (1.7% per cent).

Foreign nationals can obtain a Cypriot passport if they invest a minimum of €2.5 million in local real estate and other assets. In addition, foreigners can acquire permanent residency by investing at least €300,000 in property.

The CBC bulletin does note that, since tougher criteria were introduced for the citizenship-by-investment programme in May 2019, there has been a drop in demand for properties.

However, the CBC said, the impact of the citizenship-by-investment scheme on the property price index is not clear-cut.

This is primarily down to the fact that purchases of luxury properties are for the most part not financed by the local banking system; and the majority of high-end properties are treated as outliers and thus excluded from the sample taken to construct the property index.