FOLLOWING a period of decline lasting nearly two years, property sales in Cyprus during May staged a surprising recovery, although the reason for this is unclear.
During May, a total of 854 contracts for the purchase of property were deposited at Land Registry offices across the Island compared with 697 in May 2011; an increase of 22%.
A 22% increase may seem large at first sight. But when you consider that during May 2008 a total of 1,366 contracts were deposited, any recovery in the market still has a long way to go, but the signs are encouraging.
Of those 854 contracts, 222 (26%) were in favour of overseas buyers; 632 (74%) were in favour of Cypriot buyers.
But it is unclear why the number of sales has improved; there are a number of possible reasons:
- There was a rush to beat the deadline to benefit from the reduction in Property Transfer Fees. (The deadline has now been extended to the end of the year).
- May marks the start of the holiday and tourist season, when the property market tends to benefit from an increase in sales.
- Given the precarious position of the banking system and the Island’s economy, some people may have chosen to invest in property rather than leaving their savings in the bank.
Domestic sales
With the exception of Limassol, where there was a slight decline (-1.5%) in the number of properties sold last month compared with May 2011, sales were up in all districts. Overall, a total of 632 contracts were deposited compared with the 510 deposited in May 2011; an increase of 24%.
Overseas property sales
Sales in Paphos were particularly strong, increasing substantially (165%) compared with May last year. Sales in Limassol also increased (by 21%).
However, sales were down in all the other districts. Famagusta fared the worst, with sales down 38% compared with last year. Sales in the capital Nicosia fell by 28% and in Larnaca they fell by 17%.
Overall, a total of 222 contracts were deposited in favour of overseas buyers compared with the 187 deposited in May 2011; an increase of 19%.
