New homes construction falls 37 per cent

Nigel Howarth
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New homes construction falls 37 per cent

Following the 51% rise in the number of building permits authorised for the construction of new homes in August, September saw a fall of 37%.

In September 2020 a total of 690 building permits were authorised. The total value of these permits reached €218.7 million and the total area 201.7 thousand square metres.

The 690 permits were authorised for:

  • Residential buildings – 470
  • Non-residential buildings – 125
  • Community residences – 3
  • Civil engineering projects – 29
  • Division of plots of land – 49
  • Road construction – 14

Building permits for new homes

The 470 residential building permits authorised provided for the construction of 704 new homes. These comprised 319 single homes; an increase of 45% compared to the 220 authorised in the same period last year – and 385 multiple housing units including apartments, semis, townhouses and other residential complexes; a fall of 56.9% compared to the 894 authorised in September 2019.

Of those 704 new homes, 196 are destined for Limassol, 287 for Nicosia, 87 for Larnaca, 80 for Famagusta and 54 for Paphos.

Building Permits Issued for the Construction of New Homes
(Number of Dwellings)

Month 2019 (Dwellings) 2020 (Dwellings) Increase/Decrease %age Change
January 548 696 148 27.0%
February 576 680 104 18.1%
March 615 524 -91 -14.8%
April 742 339 -403 -54.3%
May 907 956 49 5.4%
June 812 976 470 20.2%
July 1,028 1,141
 113
 11.0%
August
 525
 790
 265
 50.5%
September
 1,114
 704
 -410
 -36.8%
Totals 6,867 6,806 -61 -0.9%

Annual construction figures

A total of 5,106 building permits were authorised during the first nine months of 2020; a fall of 1.8% compared to 5,201 authorised in the same period last year. Their total area fell by 13.9%, their total value fell by 28.6% and the number of new homes fell by 0.9%.

New home construction

The 3,701 residential building permits authorised during the period January to September 2020 provided for the construction of 6,806 new homes; 2,462 in Nicosia, 2,255 in Limassol, 871 in Larnaca, 761 in Paphos and 457 in Famagusta.

While Famagusta and Nicosia have seen an increase in the number of new homes, numbers have fallen in the three remaining districts.

According to the Cyprus Statistical Service, building permits constitute a leading indicator of future activity in the construction sector.

COVID-19 halts property transfer applications

George Psyllides
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COVID-19 halts property transfer applications

The slowdown in customer service caused by the COVID-19 pandemic has forced the land registry to stop accepting any new applications relating to property transfers until January 4, in a bid to process accumulated work, it was announced on Friday.

In a statement, the department said it would be processing all pending applications concerning sales, donations, and mortgaging of property received by Friday. New applications will be accepted from January 4 onwards unless they are exceptional cases.

The department said it would process all pending applications by December 31.

District offices will be open to the public to discuss exceptional cases, which could be processed if deemed necessary, the statement said.

It urged the public, but especially banks and other large organisations, to show the necessary understanding.

Work at various government departments has been hampered by absenteeism linked to the pandemic, as staff are either confirmed positive or quarantined because they are close contacts on top of closing for at least 24 hours for disinfection.

Editor’s note

During the first 11 months of 2020 the land registry has processed 3,518 transfers of properties, involving 4,139 parcels. Over the same period a total of 7,231 contracts of sale have been deposited at land registry offices.

Paphos sales plummet 70 per cent

Nigel Howarth
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2
Paphos sales plummet 70 per cent

Property sales in Paphos to non-EU citizens plummeted 70% in November compared to November 2019 following the cancellation of Cyprus’ Citizen-by-Investment (aka Golden Passport) scheme according to figures from the Department of Lands & Surveys.

Famagusta and Larnaca also reported falls of 65% and 46% respectively, but sales in Limassol and Nicosia (the capital) remained steady.

The total number of sales to non-EU citizens during November fell 46%.

Foreign (Non-EU) Property Sale Contracts – 2019/2020 Comparison

District Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Nicosia 2019 20 17 7 13 25 8 8 8 15 10 6 12
2020 10 11 6 6 7 4 5 3 7 21 6
Famagusta 2019 12 23 15 21 32 10 30 3 14 12 26 15
2020 34 15 15 1 16 4 3 21 23 11 9
Larnaca 2019 48 31 50 49 70 49 51 27 29 56 39 51
2020 50 41 39 11 28 32 40 19 28 38 21
Limassol 2019 69 79 75 116 189 55 82 45 39 54 60 47
2020 54 59 56 37 25 37 43 39 41 104 60
Paphos 2019 101 108 96 107 160 77 103 54 78 61 108 79
2020 73 82 30 27 68 65 43 36 39 76 32
Totals 2019 250 257 243 306 476 199 274 137 175 193 239 204
2020 221 208 146 82 144 142 134 118 138 250 128

In the first eleven months of the year property sales to non-EU nationals have fallen 38% compared to the same period last year.

Sales to EU nationals

Property sales to EU citizens fared better, falling by just 1% in November compared to November 2019.

Although sales in Larnaca and Paphos fell by 29% and 3% respectively, they held steady in Nicosia and rose 33% in Famagusta and 8% in Limassol.

Foreign (EU) Property Sale Contracts – 2019/2020 Comparison

District Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Nicosia 2019 14 14 9 19 20 16 13 5 8 10 15 14
2020 9 12 9 3 10 7 16 11 14 16 15
Famagusta 2019 9 6 14 17 10 8 17 14 10 5 9 23
2020 6 14 10 3 4 9 28 9 6 11 12
Larnaca 2019 12 12 21 18 20 11 16 13 6 23 14 23
2020 21 13 11 0 3 6 19 17 14 14 10
Limassol 2019 16 25 20 21 28 26 27 17 25 30 26 25
2020 28 30 11 12 14 15 28 12 39 33 28
Paphos 2019 56 72 61 48 69 59 73 58 61 95 61 72
2020 40 60 25 24 21 18 44 32 49 42 59
Totals 2019 107 129 125 123 147 120 146 107 110 133 125 157
2020 104 129 66 42 52 55 135 81 122 116 124

In the first eleven months of the year property sales to EU nationals have fallen 25% compared to the same period last year.

Total overseas sales

The combined total of sales to EU citizens and non-EU citizens during November accounted for 35% of all sales during the month – and fell by 31% compared to November 2019.

While sales rose by 2% in Limassol and held steady in Nicosia, they fell by 46% in Paphos, 42% in Larnaca and 40% in Famagusta.

Total Overseas Property Sale Contracts – 2019/2020 Comparison

District Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Nicosia 2019 34 30 16 32 45 24 21 13 23 20 21 26
2020 19 23 15 9 17 11 21 14 21 37 21
Famagusta 2019 21 29 29 38 42 18 47 17 24 17 35 38
2020 40 29 25 4 20 13 31 30 29 22 21
Larnaca 2019 60 43 71 67 90 60 67 40 35 79 53 74
2020 71 54 50 11 31 38 59 36 42 52 31
Limassol 2019 85 104 95 137 217 81 109 62 64 84 86 72
2020 82 89 67 49 39 52 71 51 80 137 88
Paphos 2019 157 180 157 155 229 136 176 112 139 126 169 151
2020 113 142 55 51 89 83 87 68 88 118 91
Totals 2019 257 386 368 429 623 519 420 244 285 326 364 361
2020 325 337 212 124 196 197 269 199 260 366 252

During the first eleven months of the year property sales to the overseas market have fallen 34% compared to the same period last year, with sales down in all districts.

Property sales to the domestic (Cypriot) market

Domestic sales also weakened in November, falling by 13% compared to the same month last year.

While sales in Famagusta rose by 131% and sales in Larnaca and Nicosia rose by 19% and 5% respectively, they fell 63% in Famagusta and 34% in Limassol.

Domestic Property Sale Contracts – 2019/2020 Comparison

District Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Nicosia 2019 127 164 115 137 168 121 153 90 114 163 187 154
2020 178 155 124 29 83 167 230 143 174 190 196
Famagusta 2019 32 19 16 58 45 25 2 13 16 33 13 26
2020 10 18 16 6 8 43 29 9 30 58 30
Larnaca 2019 54 82 47 73 83 42 90 53 67 81 69 88
2020 76 64 56 13 28 71 72 51 75 101 82
Limassol 2019 166 152 192 291 329 138 177 134 176 144 210 212
2020 98 136 76 23 73 150 183 142 173 265 139
Paphos 2019 30 31 28 69 175 69 54 54 34 66 64 69
2020 55 29 26 21 31 18 42 17 74 84 24
Totals 2019 409 448 398 628 800 395 476 344 407 487 543 549
2020 417 402 298 92 223 449 556 362 526 698 471

During the first eleven months of the year domestic sales have fallen 16%. With the exception of Nicosia, where an 8% rise has been recorded, sales in the remaining four districts has fallen.

Analysis of property sales since 2000

Cyprus Property Sale Contracts 2000 – 2020

Year Overseas Sales Domestic Sales Percentage
Overseas Sales		 Total
Sales
2000 450 12,214 3.6% 12,664
2001 1,207 12,849 8.6% 14,056
2002 2,548 14,111 15.3% 16,659
2003 3,981 15,294 20.7% 19,275
2004 5,384 11,947 31.1% 17,331
2005 6,485 10,106 39.1% 16,591
2006 8,355 8,598 49.3% 16,953
2007 11,281 9,964 53.1% 21,245
2008 6,636 8,031 45.2% 14,667
2009 1,761 6,409 21.6% 8,170
2010 2,030 6,568 23.6% 8,598
2011 1,652 5,366 23.5% 7,018
2012 1,476 4,793 23.5% 6,269
2013 1,017 2,750 27.0% 3,767
2014 1,193 3,334 26.4% 4,527
2015 1,349 3,603 27.2% 4,952
2016
 1,813 5,250 25.7% 7,063
2017
 2,406 6,328 27.5% 8,734
20181 4,367 4,875 47.3% 9,242
2019
 4,482 5,884 43.2% 10,366
2020 (Nov)
 2,737 4,494 37.9% 7,231
Totals
 72,610 162,768 30.8% 235,378

1 The Department of Lands & Surveys has advised that overseas sales in 2018 and subsequent year should not be compared to sales in previous years due to changes in the methodology used to classify ‘Aliens’ (foreigners).

RICS reports quarterly property price falls

Nigel Howarth
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RICS reports quarterly property price falls

The forty-third publication of the RICS Cyprus Property Price Index reports that the average price of residential apartments and houses across the island fell over the second quarter of 2020.

During the second quarter of 2020, the Cyprus economy continued to decline, with a seasonally adjusted quarterly GDP change of -11.6% and an annual seasonally adjusted GDP change of -11.9%. This is likely due to the effects of the COVID-19 pandemic becoming more apparent in Cyprus during the second quarter of 2020, after a nationwide quarantine lockdown that was set into motion in March 2020.

Quarterly property price changes

Compared with the first quarter of 2020, prices of residential houses and apartments fell by 0.93% and 0.46% respectively. Larnaca recorded the largest fall in house prices; down 3.39%, while Nicosia recorded the largest fall in apartment prices; down 1.51%.

The value of holiday homes also fell over the quarter with houses and apartments falling by 0.06% and 2.97% respectively. Limassol recorded the largest fall in house prices; down 4.29%, while Larnaca recorded the largest fall in apartment prices; down 1.33%.

Annual property price changes

On an annual basis, apartment prices rose by 0.67%, house prices rose 1.01% and office prices rose 0.13%. However, warehouse prices 0.15% and retail premises by 0.38%.

Rental values

On a quarterly basis rental values increased by 0.67% for apartments, 1.01% for houses, 5.7% for retail, 5.1% for offices and by 4.3% for warehouses.

On an annual basis, rents increased by 0.5% for apartments, 0.8% for houses and offices. However, retail premises fell 1.2% and warehouses fell 0.8%.

Gross rental yields

At the end of the second quarter of 2020, average gross rental yields stood at 4.8% for apartments, 2.5% for houses, 5.7% for retail, 4.3% for warehouses, and 5.1% for offices.

The gross rental yield is a useful yardstick as to whether property is over-valued, under-valued or priced correctly. Here is a set of rules of thumb for the housing market from the Global Property Guide:

Further reading

RICS Cyprus Property Price Index Q2 2020

Property sales slump 20 per cent

Nigel Howarth
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2
Property sales slump 20 per cent

Following the termination of the Citizen-by-Investment (aka Golden Passport) scheme at the start of the month in the aftermath of Al Jazeera Cyprus Papers, property sales fell by a fifth in November compared with the same month last year.

In November 2020 a total of 723 contracts for the sale of property were deposited at Land Registry offices across the island compared to 907 in November 2019; a all of 20%, which followed monthly increases of 14% in September and 31% in October.

With the exception of Famagusta and Nicosia, where sales rose by 6% and 4% respectively, they fell in the remaining three districts.

The two districts most popular with overseas investors took the full brunt of the fall with sales in Paphos falling 51% and sales in Limassol falling 23%. Property sales in Larnaca fell by 7%.

Total Property Sale Contracts – 2019/2020 Comparison

District Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Nicosia 2019 161 194 131 169 213 145 174 103 137 183 208 180
2020 197 178 139 38 100 178 251 157 195 227 217
Famagusta 2019 53 48 45 96 87 43 49 30 40 50 48 64
2020 50 47 41 10 28 56 60 39 59 80 51
Larnaca 2019 114 125 118 140 173 102 157 93 102 160 122 162
2020 147 118 106 24 59 109 131 87 117 153 113
Limassol 2019 251 256 287 428 546 219 286 196 240 228 296 284
2020 180 225 143 72 112 202 254 193 253 402 227
Paphos 2019 187 211 185 224 404 205 230 166 173 192 233 220
2020 168 171 81 72 120 101 129 85 162 202 115
Totals 2019 766 834 766 1057 1423 714 896 588 662 813 907 910
2020 742 739 510 216 419 646 825 561 786 1,064 723

Total property sales – year to date

In the first eleven months of 2020 property sales are down by 24% compared to the same period in 2019.

While sales in Nicosia have risen slightly (3%) compared to the numbers sold during the same period last year, other districts have yet to return to 2019 levels.

Sales in Paphos are down 42% and 30% in Limassol, while sales in Larnaca and Famagusta and are down 17% and 12% respectively.

The Department of Lands and Surveys has yet to publish a breakdown of the figures showing domestic and foreign sales. We’ll bring you the figures as soon as they’re published.

Larnaca port and marina is a mammoth project

Panos Alexandrou
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Larnaca port and marina is a mammoth project

Following a three-year international public tender procurement, the Republic of Cyprus reached an agreement in March with a consortium known as Kition Ocean Holdings consisting of a Cypriot and an Israeli company, to redevelop and operate the historic Larnaca Port and Marina, the island’s largest infrastructure project of its kind.

With the signing of the Concession Agreement that is expected to be completed in early December, the process of the “transition period” will be activated in January 2021, which will last up to 12 months.

During this period, Kition Ocean Holdings Ltd in full cooperation with the Government and all competent authorities will proceed to secure all the necessary permits and approvals required by the contract, for the smooth delivery of the entire project to the consortium.

Construction work on the project is expected to start after the end of the “transition period”, i.e. at the beginning of 2022 and to be completed in four phases by 2037.

The first phase will last five years and among other things, aims to complete the new infrastructure works, so that citizens can use and enjoy the new spaces created.

These mainly include the expansion of the road network with the creation of a new road that will connect Athinon Street with Famagusta Street, the configuration of the coastal pedestrian street and the landscaping of the new green spaces.

Also, the works include the expansion and reconstruction of the existing Marina, so that it can accommodate 650 boats from 5 to 150 metres long and offer facilities such as boat repair and services.

The upgraded marina will also have the possibility to accommodate “mega yachts” up to 150m and approach a different clientele, which today seems reduced.

The works also include the construction of the Marina Yacht Club with offices, cafes, event venues, sailing schools, diving schools and navigation stores.

It is worth noting that the existing old pier of the Marina, after being maintained, will be harmoniously integrated into the premises of the new facilities.

The new upgraded Larnaca Port will now be able to accommodate ships up to 450 metres in length, such as luxury cruise ships, energy exploration vessels, military, and other merchant ships.

Leisure destination

It is also very important that during the first phase, an ultra-modern passenger terminal will be constructed to serve large cruise ships, which will now be able to include Larnaca, within their cruises, as a unique leisure destination.

Completion of the project follows three phases of construction including luxury villas, imposing residential buildings with 360-degree unobstructed views, office buildings, a shopping area with restaurants and a traditional market where local producers will be able to sell their products in a pleasant environment.

In the second phase, we plan to build the educational element of this project of approximately 20,000 sqm of University Lecture and Research Theatres where a Medical School will co-exist next to a Medical Centre, a Hotel and Hospitality College and, finally, a Blue Marine, Environmental and Energy University.

Within the Port area, we plan to increase and improve existing storage facilities and create a secure area for high level/quality yacht repairs.

During the third phase estimated to take place before year 10 of this project, we will be constructing 45 Luxury Villas on the new breakwater with their own private berths.

On the same breakwater, we will build a state-of-the-art luxury residential lighthouse which will offer 360-degree views from all the apartments.

North of the Marina, the final U-shape residential building will be constructed together with a 5-star business hotel, a commercial centre and two additional luxury residential buildings which will be served and maintained by the hotel.

Such a project cannot be complete without the icing on the cake, which in our case will be the only Private Island in Cyprus.

During the final fourth phase, we will be constructing the western part of the Project which consists of several office buildings, parking spaces, studios and small-size apartments suitable for students or people visiting Larnaca regularly for work.

The magnitude of the economic importance of this project, for Larnaca and Cyprus in general, is calculated as follows:

For our country, the estimated Revenues are expected to reach €19.6 billion.

  • We expect to create in the region of 4000 new jobs in addition to other temporary jobs.
  • We have budgeted on infrastructure alone close to €604 million, to complete this amazing project, the cost estimated in the region of €1.2 billion.

One of the main reasons that our company decided to proceed with the development of this project, is the fact that we consider the city and the wider area of ??Larnaca historic, beautiful and with great potential for development.

We believe that the innovative design of the various services that the project will offer to the residents of Larnaca but also to visitors from Cyprus and abroad will raise the image of the city.

Furthermore, we believe that this project will contribute to upgrading the tourist model of the island.

Our goal is to highlight the cultural heritage and the character of our island.

The creation of a traditional market within the project, as well as other spaces suitable to host social and cultural events will help positively in this direction.

With the operation of the new passenger terminal at the port and the hosting of large cruise ships, we are sure this will attract tourists from many parts of the world and contribute significantly to the upgrading of our tourist model.

There is an effort to make Cyprus a yachting destination.

To achieve this goal many marinas with different character and sizes will have to be created so that there are several options for yacht owners.

Also, in our opinion, the creation of many marinas in combination with small individual docks where a boat can park for a few hours automatically creates the infrastructure of an inland route along the Cyprus coastline for yachts.

We are convinced this project, once completed, will be a point of reference not only for Larnaca and Cyprus but also for the wider eastern Mediterranean region, a fact for which we will all be proud.

About the author

Panos Alexandrou is the concessionaire representative of the Larnaca Port and Marina development.

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