One out of five foreign buyers of real estate in Cyprus spend over €3 million to purchase property in Cyprus, with over 250 contracts for properties valued over €1.5 million having been signed during the past three years.
According to the report by PwC Cyprus titled “Cyprus Real Estate Market – 2016 Year in Review”, although up to 2013 sales of luxury residences in Cyprus were stable at approximately 40 properties per years, since 2014 with the introduction of the citizenship incentives, demand for luxury residences has significantly increased.
Indicative of this fact is that in 2016, the number of sales of luxury residences has almost quadrupled compared to 2013.
While in 2013, only 32 sales of luxury residences were recorded, within four years the number increased by 38.3% to reach 117 sales in 2016. The corresponding numbers for 2014 and 2015 was 49 and 88 transactions.
Also worth noting is that the majority of transactions in luxury residences in all of Cyprus ranges between €2 million and €3 million. In addition, demand for real estate above €3 million has increased over the years, with a corresponding increase in the construction of luxury residences.
As the supply of luxury residences increases, so does the demand, says PwC Cyprus in its report.
Limassol is the city with the most sales of luxury residences. According to PwC Cyprus, Limassol responded positively to the increased demand for this sort of real estate, with more luxury residences being planned. For this reason, Limassol was the first choice for luxury residences (63.2% of total transactions in 2016), followed by Paphos (29.9%).
The report also says that in 2016, 70% of the transactions in Limassol were for the purchase of luxury apartments, while the remaining 30% was for villas or mansions. Contrarily, in Paphos all the sales of luxury residences were villas or mansions.
Nicosia, Larnaca and Famagusta were considerably less active in the sale of luxury residences. Famagusta draws 4.3% of buyers of luxury residences, while Larnaca and Nicosia draw 1.7% and 0.9% respectively.
According to PwC, the increase in sales of luxury residences is largely due to the citizenship incentives which have drawn buyers from outside the EU (Chinese, Russian, Indian and UAE nationals), along with debt for asset swaps by banks to restructure troubled loans. Finally, an additional factor was the competition in the banking sector, along with increased liquidity which contributed to the supply of cheap financing.