In a real estate market “x-ray”, Deloitte proceeded with a relevant report highlighting the record year of the sector, while also analyzing sales by province and type. Simultaneously, the report examines issues such as the continuous increase in prices and interest rates, and their impacts.
According to the study’s results, 2023 was a new record year for the real estate sector in Cyprus. The market closed with a total of 25,400 transactions with a total value of €5.6 billion. The upward trend is mainly due to transactions in residential properties, which accounted for 61% of the total value of transactions in the sector, reaching €3.4 billion from 13,200 transactions. The average transaction value for 2023 was €259,000 compared to €257,000 in 2022. The slight increase largely came from new properties, which represented 69% of total residential sales.
Land transactions (plots and parcels) follow, with a value of €1.9 billion through 11,200 transactions, accounting for 34% of the total sales value, remaining generally stable compared to 2022 in terms of transaction value, although with a higher number of transactions. The average transaction value for land in 2023 was €168,000 compared to €175,000 in 2022. The decrease is partly due to the higher volume of transactions in Nicosia and Larnaca, where the average transaction value historically is lower than that of Limassol and Paphos.
Finally, commercial property transactions, although lower in number compared to 2022, were higher in value, reaching €121 million, equal to 2% of the total sector value. The average transaction value for 2023 was €238,000, compared to €262,000 in 2022. The decrease is partly due to fewer transactions in new properties in Limassol.
At provincial level, Larnaca showed an impressive increase in transaction value compared to 2022 (28%), attributed to both an increase in transaction volume and higher average property values. Significantly, Larnaca has recorded growth for the third consecutive year, nearly doubling both in transaction value and volume since 2020. Transactions in Limassol continued to dominate, representing 41% of the total sales value, while all other cities, except Larnaca, recorded slightly lower sales values compared to 2022.
Ratio of Foreign and Domestic Buyers
The ratio of domestic to foreign property buyers remained generally stable from 2018 to 2023, at approximately 55% domestic and 45% foreign. The only exceptions were 2020 and 2021, which were heavily affected by COVID-19 and related travel restrictions. Historically, Nicosia and Limassol attracted the highest volumes of domestic buyers. However, Larnaca and Paphos also recorded increased volumes in 2023 due to continued efforts to accelerate development.
Limassol and Paphos continue to attract the highest volumes of foreign buyers, while Larnaca also recorded record growth in 2023. However, the profile of foreign investors varies between these cities, with Paphos attracting more investments related to holiday homes, while Limassol and Larnaca attract a more balanced mix of residential and commercial properties.
No Changes Expected in 2024
The report also presents the results of a survey conducted by Deloitte Cyprus for the real estate sector, conducted among industry professionals. The survey indicates that no significant changes are expected in the property landscape in 2024, such as financing costs and capital availability, as well as sales and rental price levels. Also, according to the survey results, apartments are expected to maintain their position as the most attractive investment opportunity over the next 12 to 18 months, despite participants’ estimates that luxury apartments in high-rise developments are likely to decrease.
George Martides, Head of the Real Estate Department and Head of Financial Advisory Services at Deloitte Cyprus, noted that “The stable and continuous improvement of the real estate market’s performance in terms of both transaction volume and value, as evidenced by our study, demonstrates the sector’s resilience to the various pressures exerted on our economy (inflation, interest rates, external factors). These performances fill us with optimism but also with a sense of responsibility regarding the proper handling of the new challenges ahead of us – such as sustainable and sustainable development, the pace of technological and Artificial Intelligence development, government reform, reducing bureaucracy, affordable housing – and intensifying our efforts to attract new forms of investment. All this can be achieved through proper planning, cooperation, and coordination between the private and public sectors,” he emphasized. Source: stockwatch.com.cy
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