A large stock of real estate in Cyprus is expected to go on sale and there are two reasons for this, according to the European Semester Winter Package. This assesses Member States’ progress on economic and social priorities.
The first reason is because purchased property by foreigners through the citizenship by investment scheme will go on sale since the relevant provision is for this to be in the buyer’s possession for at least three years.
And the second is the sale of non-performing loans by Cypriot banks to specialised managers. This leads to a faster sale of collateral, and as a result, a large stock of real estate goes under the hammer, according to the report.
The Commission also notes that “according to reports, construction is shifting to luxury properties to adapt to changing demand and to allow construction companies to benefit from pre-sales financing. This pre-sales financing is still the most important source of funding, as bank credit is still extremely limited.”
At the same time, foreigners purchased almost half (48%) of the total property sold in Cyprus in 2018. This has also contributed to regional differences observed in price trends. Real estate prices in Limassol, where the Russian community is mainly concentrated, have risen much higher than elsewhere, according to the report.