After nearly seven years of falling house prices, the real estate market in Cyprus is improving, As the economy improves, the high price decreases are stagnating, property transactions are rising and construction is increasing. Over the years, confidence in the real estate has been increasing steadily and this is due to the reasons listed below.
- Tourism, financial services, and real estate account for 80% of Cyprus’s GDP. As shown in the graph below, tourism revenue is growing every year.
- Yields make property attractive to investors. The chart below shows the yield for monthly rent in three very popular destinations.
- As of 2015, 73% of the properties purchases were from locals. However, the number of foreign investments is growing, primarily from the UK investors. Additionally, Cyprus’ capital, Nicosia, Limassol and Larnaca are areas supported by locals while Paphos and Famagusta are mainly supported by foreign demand.
- Nicosia, Cyprus’ capital, house prices declined by 1.42% (increased 0.56% inflation-adjusted) to an average price of €372,714 (US$414,065)
- Paphos house prices rose by 3.1% (5.7% inflation-adjusted) to an average price of €353,991 (US$393,265)
- In Larnaca, house prices declined by 0.04% (increased 1.97% inflation-adjusted) to an average price of €277,222 (US$307,978)
- In Limassol, house prices declined by 3.18% (-1.23% inflation-adjusted) to an average price of €304,105 (US$337,844)
- Furthermore, mortgage rates have been declining over the past few years as shown in the chart below.
- It is predicted that GDP will grow 2% in 2017, while debt servicing is most likely going to increase due to more restructuring of bad loans.
The graphs and charts mentioned above prove that investing in Cyprus can be successful. But if those are not enough, Cyprus offers additional incentive to investors in the property market including, 50% reduction in transfer fees for all sales and 100% exemption from future capital gains tax for profit on properties. Additionally, the property tax will be fully repealed in 2017.
The government initiated a program in 2016 that grants full Cypriot Citizenship to those that invest over 2 million euros. This will allow investors to live and work in all 28 EU member countries.
To find out how to go about getting an international mortgage to finance your purchase, and for help in every step of the process, contact Crossborder to see if you qualify.