Property sales in Paphos dominated by overseas buyers

Nigel Howarth
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Property sales in Paphos dominated by overseas buyers

The latest sales figures from the Department of Lands and Surveys show that overseas buyers account for nearly three quarters of total property sales in Paphos up to the end of October.

Market segment analysis

Property sales to the overseas market

The total number of property sales to the overseas market (both EU and non-EU citizens) in October rose 9% compared October 2022.

Sales rose in all districts with the exception of Limassol, where they fell by 15%.

Paphos recorded the greatest number of sales (186), followed by Limassol (164), Larnaca (121), Nicosia (44), and finally Famagusta (35).

Property sales to EU and non-EU citizens October 2023
Property sales to the overseas market – 2022/2023 Comparison

Overseas real estate sales during the first ten months of 2023 reached 5,839; a 26% increase on the 4,640 achieved in the same period last year.

Property sales to non-EU citizens

Sales to non-EU citizens rose 20% compared to October 2022 accounting for 32% of the total number of sales achieved during the month.

With the exception of Nicosia, where October sales fell by 16% compared to the same month last year, they rose by 63% in Famagusta, 31% in Larnaca, 18% in Paphos, and 14% in Limassol.

Limassol recorded the highest number of sales, followed by Paphos, Larnaca, Famagusta, and  Nicosia.

Non-EU property sales October 2023
Overseas (non-EU) Sale Transactions – 2022/2023 Comparison

Sales to non-EU nationals during the first ten months of 2023 reached 4,199; a 62% increase on the 2,597 achieved in the first ten months of 2022.

Property sales to EU citizens

Sales to EU nationals continued their downward trend, falling by 11% compared to October 2022. The only two districts to buck the trend were Nicosia, where sales rose by 47%, and Limassol, where sales rose by 16%.

Sales in Paphos fell by 29%, while sales in Famagusta and Larnaca by 10%, and 22% respectively.

Property sales EU citizens October 2023
Overseas (EU) Sale Transactions – 2022/2023 Comparison

Sales to EU nationals during the first ten months of 2023 reached 1,640; a fall of 20% compared to the 2,043 achieved in the same period last year.

Overseas market preferences

An analysis of property sales to the overseas market over the first ten months of 2023 reveals that foreign buyers prefer to buy in the coastal areas of the island.

Paphos is by far the most popular destination, with overseas sales accounting for 71% of total sales in the district. Paphos is followed by Larnaca (47%), Limassol (46%), Famagusta (40%) and finally Nicosia with overseas buyers accounting for just 16% of sales in the district.

Buying preferences by district
Overseas buyers preferences by district 2023

Property sales to the domestic market

Real estate sales to the domestic market in October rose 14% compared with October 2022 but with Limassol reporting a fall of 11%.

Nicosia recorded the greatest number of sales (248) followed by Limassol (219), Larnaca (143), Paphos (89), and Famagusta (57).

Property sales domestic market October 2023
Domestic Sale Transactions – 2022/2023 Comparison

Sales to the domestic market during the first ten months of 2023 reached 6,986; an increase of 14% on the 6,141 achieved during the same period last year.

Monthly property sales 2008 to October 2023

RICS/KPMG property price & rental index Q3 2023

Nigel Howarth
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RICS/KPMG property price & rental index Q3 2023

The 56th quarterly publication of the RICS Cyprus Property Index with KPMG in Cyprus records the property price and rental index, tracking property and rental prices across all Cyprus districts and main property types.

Speaking on behalf of KPMG in Cyprus, Christophoros Anayiotos, Head of Real Estate Industry Group, commented, “The upward trend in Cyprus Property Index continued during the third quarter of 2023, with Larnaca recording significant overall increases.

“The best-performing asset class is again Apartments, followed closely by Houses, with the highest increases being recorded in Larnaca and Limassol. Warehouses and Offices recorded modest increases, with the best performers being Larnaca for Offices and Limassol for Warehouses.

“Retail recorded zero increases, with marginal decreases in Famagusta and Limassol. Rental values also increased, with holiday apartments and residential sector properties (apartments, houses) exhibiting the largest increases. Overall, the Cyprus Property Index shows very positive returns for the residential sector and the holiday properties, which seem to be driven by resilient demand”.

Speaking on behalf of RICS, Simon Rubinsohn, RICS Chief Economist, said, “The relatively solid economic picture continues to be reflected in the firm tone of the Cyprus Property Price Index. Residential, in its various forms as an asset class, continues to outperform, and looking at the feedback to the sentiment-based RICS Cyprus Commercial Property Monitor, this is likely to continue into the first half of 2024.”

“Meanwhile, in another signal that the macro environment is still positive, occupier demand to take up office space is continuing to grow with prime real estate particularly sought after.”

Extracts from the price and rental index

Market values year-on-year

During the third quarter of 2023, increases were recorded in the price of residential properties, with apartments running slightly ahead of houses. Offices and warehouses also recorded marginal gains, while retail premises remained stable.

  • Apartments +9.50%
  • Houses +6.94%
  • Retail premises +0.25%
  • Warehouses +5.78%
  • Offices +4.74%

Holiday home prices

Holiday assets (apartments & houses) continued their upward trend with both continuing to perform strongly. Over the past year, both Holiday Apartments and Holiday Houses have seen price increases in excess of 7%.

Looking at the numbers at a district level, the quarterly changes show Limassol recording the largest increase in Holiday Houses and outperforming Apartments in the process. Meanwhile, in Paphos and Famagusta the rise in prices for the latter slightly outperformed the former.

  • Holiday apartments +7.11%
  • Holiday houses +7.37%

Rental values year-on-year

Year-on-year rental values showed increases in all asset categories, the highest being in Apartments, followed closely by Holiday Apartments, then Houses. Retail and Warehouse asset classes are at the lower end of the scale, recording small increases.

  • Apartments +18.57%
  • Houses +12.80%
  • Retail premises +3.78%
  • Warehouses +2.55%
  • Offices +7.45%
  • Holiday apartments +18.35%
  • Holiday houses +9.99%

Rental yields

Yields have recorded marginal increases since last year, the largest in Holiday Apartments followed by Apartments.

Retail and Offices recorded marginal increases, whilst Warehouses are showing a small decrease.

  • Apartments 5.53%
  • Houses 2.95%
  • Retail 5.84%
  • Warehouse 4.24%
  • Office 5.45%
  • Holiday Apartments 5.82%
  • Holiday Houses 2.75%

Notional buildings

The RICS Cyprus Property Price Index with KPMG in Cyprus monitors hypothetical or notional buildings, each having specific characteristics. The methodology underpinning Index was developed by the University of Reading.

The price per sqm is based on the Gross External Area of the property (as defined in the RICS’ Code of Measurement Practice 8th Edition), which includes the living area and covered verandas but excludes common areas.

The estimation of price levels is carried out by accredited RICS property professionals who are active in the relevant markets.

Property sales still growing

Nigel Howarth
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Property sales still growing

The number of property sales in October (as measured by the number of contracts deposited at Land Registry offices) rose 12 per cent compared to October 2022 according to official figures from the Department of Lands and Surveys.

Although there’s been a marginal slowdown in the rate of growth in sales over the past couple of months, Cyprus remains firmly on target to achieve the highest number of property sales on record since 2008 by the end of the year.

However, it’s unclear whether the crisis in the Middle East will impact the market and estate agents say it’s too early to come to any concrete conclusions.

The total number of property sales achieved in October, which include domestic dwellings, retail premises, offices, warehouses and land (fields and plots), reached 1,306 compared to 1,171 in October 2022.

Although sales in Limassol fell by 1 per cent, they rose in remaining four districts. But despite the fall Limassol recorded the highest number of sales (383), followed by Nicosia (292), Paphos (275), Larnaca (264), and finally Famagusta (92).

Total property sales to October 2023
Total Property Sale Transactions – 2022/2023 Comparison

Year to date property sales

Sales during the first ten months of 2023 sales reached 12,825; an increase of 19% compared to the 10,781 achieved in same period last year with sales rising in all districts.

It is also the highest number of contracts deposited since 2008 when the number reached 12,245.

Year to date sales 2023

Property sales agreements hit €1 billion

Editorial
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Property sales agreements hit €1 billion

The value of property sales agreements submitted in the third quarter reached €1 billion, with the real estate market maintaining its strength despite challenges.

According to property sales data from the Department of Land and Surveys, processed by the Real Estate Agents Registration Council, 2,983 sales agreements were submitted across Cyprus from July to September.

Transfers totalling €438.2 million were completed during Q3, with Limassol accounting for the richest share at €130.5 million, while Nicosia had the highest number of transfers.

In Nicosia district, 944 transfers were recorded valued at €126.1 million.

The majority of transactions were related to fields (382), apartments (218), and plots (213).

In Limassol district, there were 801 sales valued at €130.5 million, surpassing all other districts.

Most interest was in buying fields (440).

In Paphos district, sales during Q3 reached 315, with a total value of €48.2 million.

The overwhelming majority of transfers were related to fields (125).

Larnaca had 677 sales worth €101 million, with most relating to fields (290).

Famagusta district had 173 transactions worth €32.4 million, and there was significant interest in fields (81) and apartments (51).

Marinos Kynegirou, President of the Real Estate Agents Registration Council, said the sector continues to show resilience in all cities and districts.

“Despite the apparent impact of inflation on purchasing power, combined with high interest rates on housing loans, we see the property market endures.

“We expect to see the impact of the war in Israel in the coming months.”

Swimming pool legislation upgrade

Jonathan Shkurko
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Swimming pool legislation upgrade

A bill aimed at upgrading the legislation related to the features and inspections of public and private swimming pools is expected to be presented in parliament before the end of the year, after the issue was discussed during a House interior committee meeting on Thursday.

This development was discussed during a session of the parliamentary Committee on Internal Affairs. Committee members have requested that the bill be submitted to parliament by the end of the year. Notably, there has been a prior legislative proposal by the Edek MP, Elias Myrianthous, dating back to 2019 concerning the same matter.

The bill, currently under review by the legal service, categorises swimming pools into three distinct groups:

  • The first category includes pools located within water parks.
  • The second pertains to hotel and tourist accommodation pools.
  • Third encompasses all other swimming pools, excluding those serving more than five residential units.

Depending on their category, these swimming pools will require construction permits and periodic inspections. Health and safety inspections will be systematically conducted for pools in the first two categories, while pools in the third category will undergo sampling inspections only. Additionally, lifeguards will be required for supervision in the first two categories.

Following the meeting, the committee’s vice chair, AKEL MP Marina Nicolaou, said the bill has completed its drafting process, underlining that the current legislation, dating back to 1992, is outdated.

“Modernising it is a step in the right direction,” she said.

EDEK MP Elias Myrianthous urged for the bill to be promptly presented in parliament and to be voted on before the upcoming summer season. He added that the existing legislation regulating swimming pools is outdated, despite EU guidelines and standards regulating such matters.

“This is what it is urgent to change the regulations regarding swimming pools, particularly those pertaining to safety, water quality, and usage,” he said.

Comments from the Editor

This is how the Cyprus law relating to swimming pools currently stands:

Cyprus Law N.55(I)/92 paragraph 2 states  states that the term ‘public swimming pool’ also includes the swimming pools of buildings which are used by the owners of the units or their tenants.

Regulation Number 368/96 paragraph 47 (1) states that all workers on the swimming pool site or in connection with its operation must hold a health certificate, be clean and of good behaviour.

Regulation Number 368/96 paragraph 47(2) states that all the trained supervisors will be on duty during the operation and the use of the swimming pool. Their number is determined in accordance with the size of the swimming pool and the number of the persons usually using the swimming pool.

Regulation Number 368/96 paragraph 47 (2)(a)(i) states that for small swimming pools at least one trained supervisor is necessary to be appointed.

Regulation Number 368/96 Part VII paragraph 53 states that a license is needed for the operation of a swimming pool by applying to the relevant authority. The last decision is made by the Minister.

Property market boosted by foreign investors

Kyriacos Nicolaou
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Property market boosted by foreign investors

Despite numerous challenges stemming primarily from rising loan interest rates, persistent inflation, the repercussions of the war in Ukraine, and the ongoing shockwaves of the coronavirus pandemic, the Cyprus real estate market continues to perform well.

According to the latest real estate dynamics in Cyprus report by Delfi Analytics, a member of the Delfi Partners Group, a total of approximately 11,655 property sales were concluded in Cyprus from January to August 2023, with a combined value of nearly €2.8 billion.

Comparing this period to the same timeframe in the previous year, there is a significant 31 per cent increase in property sales to foreign buyers.

Notably, 46 per cent of the document registrations during the first eight months of 2023 originate from foreign buyers, underscoring the market appeal to international investors.

George Foukarides, Director of Delfi Properties, explained that “despite persistent challenges beginning to affect it, the Cypriot real estate market continues to display remarkable resilience”.

“Both domestic and international demand for properties remains largely unaffected,” he added.

While the volume of property sales for the first eight months of 2023 is slightly lower (-2.8 per cent) compared to the same period in the previous year, the overall value has increased by 7.1 per cent due to rising property prices.

In terms of regional sales, the Limassol district recorded 3,384 property sales, reflecting a 0.6 per cent increase compared to the same period in 2022.

In contrast, Nicosia district experienced a significant 12.9 per cent decrease in sales volume, whereas Larnaca district, with 2,361 property sales, registered a 10.3 per cent increase.

Property sales in Paphos and Famagusta districts decreased by 4.7 per cent and 1.9 per cent, respectively.

“Regionally, Limassol continues to exert significant influence on the Cypriot real estate market,” Foukarides stated.

“It is also noteworthy that foreign interest remains on the rise, while local buyers appear to be more cautious,” the Delfi Properties Director added.

Meanwhile, Natasa Apostolou, Special Projects Manager at Delfi Partners and Company, highlighted Cyprus’ appeal as an investment hub.

“Cyprus, driven by factors like political stability and an attractive legal framework, is becoming one of the fastest-growing investment destinations in Europe. The revival of the real estate sector is largely due to foreign capital,” she added.

“The rapid growth and influx of foreign capital have led to an increase in property prices, with significant demand for luxury residences and Grade A offices, as many foreign companies have moved their offices and personnel to the island,” she added.

However, Apostolou noted that “the balancing of foreign investments with local needs is of utmost importance for ensuring the sustainable and long-term growth of the sector, especially as rising inflation burdens the economy”.

The value of properties sold in Limassol district slightly exceeds €1.1 billion, constituting 39.3 per cent of the total property sales value from January to August 2023.

In Nicosia, properties valued at €567 million were sold during the eight-month period, making up 20.3 per cent of the total, while Paphos registered property sales amounting to €479 million, accounting for 17.1 per cent.

In contrast, Larnaca and Famagusta districts had property sales of €459 million and €185 million, respectively.

An interesting aspect is the data concerning the average property sale prices by district. Nicosia has the lowest average sale price at €180,000, significantly lower than Limassol, where the average sale price is €326,000. Nicosia’s average price has decreased by -1.2 per cent compared to the same period last year, while Limassol’s average price increased by 11.5 per cent.

The Famagusta district, meanwhile, witnessed the most substantial increase in average sale price on an annual basis, skyrocketing by 52.4 per cent to €272,000. Paphos follows with an average of €230,000 and a 14.4 per cent increase.

Finally, the Larnaca district, with an average sale price of €194,000 for the eight-month period, is closer to Nicosia’s figures, although it exhibits an 8.3 per cent increase.

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