€5.2 billion in value of real estate transactions

The total value of transactions in 2022 reached €5.2 billion, according to an analysis by PwC, recording an annual increase of 27%.

In total, the volume of transactions reached 22,500, marking an annual increase of 12%, surpassing even the pre-pandemic levels of 2019 by 31%.

Based on the latest edition of PwC on the Cyprus real estate and land development market, the provinces of Limassol, Larnaca and Paphos recorded double-digit growth rates in terms of transaction volume in 2022, compared to 2021 (increases of 18%, 23% and 31%, respectively).

On the contrary, the provinces of Nicosia and Famagusta saw a marginal drop of 6% and 1% respectively.

Apartments are the driving force

As noted, the driving force of the market in 2022 was undoubtedly apartments as transactions worth €2.1 billion were recorded, representing an increase of 42% compared to 2021.

The increased demand seems to be attributed to the arrival of foreign companies, which have chosen to establish their headquarters in Cyprus and transfer their activities and personnel to the country, with a focus on the coastal areas.

In addition, the increased demand is also due to resilient domestic demand. In 2022, apartment transactions reached 9,000, compared to 7,000 in 2021, an increase of 29%.

Luxury properties with a value of more than €1.5m maintain their demand

The termination of the Cyprus Investment Program (with effect from 1 November 2020), led to a reduction in activity levels in the luxury real estate sector (€1.5 million).

During 2022, a partial recovery of this sector was observed, with a total of 220 luxury real estate transactions, registering an annual increase of 36% and signaling that this sector remains active.

Residential units can withstand €100 thousand - €300 thousand.

Transactions of residential units valued at €100,000 - €300,000 reached 7,600 in 2022, marking an annual increase of 19%.

Compared to the pre-pandemic levels of 2019, an increase of 41% is recorded.

This is mainly attributed to increased levels of demand for first homes and increasing investment activity in rental housing (especially apartments), combined with increased demand from foreign buyers relocating to Cyprus.

Continuous increase in the cost of construction materials

Despite rising levels of demand for property, as evidenced by the transaction figures presented, the pace of issuing building permits slowed during the 10th month of 2022 (latest data available), recording an annual decline of around 5%.

This, it is noted, can be largely attributed to the continued increase in the cost of construction materials sustained in 2021 and 2022, with prices increasing by 30% over a two-year period, disrupting market balances, particularly in private/single housing sector.

Commenting on the Report, Konstantinos Constantinou, Managing Partner of PwC Cyprus said:

"In an environment where at a wider geopolitical level we are facing many challenges and crises, the Cypriot real estate sector, fueled by the ongoing demographic changes observed on the island, has proven to be particularly resilient, exceeding expectations in transaction levels."

Source: stockwatch.com.cy

Photo: pixabay.com