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Property in Cyprus: what to know and where to buy in 2020

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Property prices in Cyprus have been falling since 2008, but things are finally looking up now that the economy recovered from the banking crisis of 2012−2013. Property prices in Cyprus declined until the end of 2016.

Price dynamics

Residential property prices fell 30% since the 2008 crisis but in 2017, an upward trend emerged. It has been complimented by a surge in residential real estate development: last February, the amount of new houses put on the market increased by 22.4% year-on-year. At the moment, there is a stable growth in construction volumes.

Q3 2018Q4 2018Q1 2019Q2 2019
House Price Index7676.777.277.6
Quarterly price change, %0.660.920.650.52
Annual price change, %2.012.542.662.78

Renewed development activity has been followed by an increase in transactions: property sales grew by 11.1% in Q1 2019, compared to the same period in 2018. Moreover, according to a report by the Central Bank of Cyprus, the number of property transactions to foreign buyers increased by 16.7% during the same period, while local activity only gained 5.8%.

Locations and prices

The average price for a two-bedroom flat in Cyprus runs at €176,000, according to data by the Zyprus portal, but prices vary depending on the region. In the most expensive areas of the island, prices are slightly higher.

CityPrice, EUR
Larnaca189,000
Limassol290,000
Nicosia158,000
Paphos135,000
Paralimni108,000
Average176,000

The most popular places with buyers are Limassol, Paphos, Larnaca, Paralimni and Nicosia.

Limassol is regarded as the second capital of the Republic. It's a hive of activity with the most expensive flats and a wide choice of prime property.

Paphos is famous for its landscape: many houses are located on hills with breath-taking views over the sea. It is perfect for those who want a quiet and relaxing lifestyle.

Larnaca has beautiful beaches and an international airport that is a good place for buyers with medium budgets. Not far from here is the Paralimni resort, which has the cheapest property on the island.

Nicosia, the capital, is not popular with foreign holiday buyers because it is far from the sea, but business visitors are a lot more active on the property market here.

Julia Dorokhina Julia Dorokhina Real Estate Expert Tranio

A three-bedroom detached house with a pool in Cyprus costs €486,000 on average, but prices vary greatly depending on the available amenities and location.

CityPrice, EUR
Larnaca433,000
Limassol590,000
Nicosia463,000
Paphos599,000
Paralimni344,000
Average485,800

Mortgages and financing

Foreign citizens don’t face any obstacles when applying for a mortgage in Cyprus. The average interest rate is currently 2.10%, compared to 2.20% in 2019. By leaving the loan terms unaltered and dropping the interest rate, the Central Bank of Cyprus hopes to stimulate lending in order to encourage demand for residential property.

Banks in Cyprus usually grant mortgages for a loan-to-value ratio (LTV) of 70/30. Buyers also have the option of taking out a loan in a foreign currency for a maximum term of 15 years. The main restriction prohibits buyers from taking out a loan for which repayments exceed 40% of the borrower's average monthly income.

Rental market

Rental rates are still declining in Cyprus. By Q2 2019, the average rate for apartments was 16.4% more expensive than the previous year and house rentals reached 14.4%. Currently it costs about €450-500 per month on average.

CityRental rate, EUR
Larnaca430
Limassol460
Nicosia600
Paphos460
Average487.5

House rentals cost about €600-650 per month on average for a medium quality 250 sq m townhouse.

CityRental rate, EUR
Larnaca520
Limassol600
Nicosia700
Paphos600
Average605

The simultaneous rise in prices and rental rates has stabilised yields, which remain much better for flats (4.8%) than for homes (2.5%).

Future trends and influencers

Indicator20192020 (forecast)2021 (forecast)
GDP growth, annual change, %3.2-7.46.1
Inflation rate annual change, %0.5-0.21
Unemployment rate, %7.18.67.5

The revival has largely benefited from local and EU-wide economic recovery. In 2019, the country’s GDP growth rate also struck a positive note and grew by 3.2%. European authorities now anticipate recession of 7.4% in 2020 and further gain of 6.1% in 2021. Internal and external demand as well as falling unemployment combined with low interest rates on mortgages and low inflation should also support the real estate recovery.

Ivan Chepizhko, Tranio

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