“No doubt this was stimulated by lowering property prices Cyprus-wide, as well as new positive developments in the macro economic landscape,” states Managing Director, Urban Splash Real Estate & Chartered Surveyors, Lambros Kaloyirou MRICS.
According to Kaloyirou, much of the new foreign interest is coming from investment funds looking to acquire significant deals on large-scale non-completed projects, particularly underdeveloped land with planning permits that are ready to start. Most of this interest is in city centre and prime location developments, as well as beachfront properties.
“Funds have been seeking to buy large volumes at one third of their market price. Although this is not entirely feasible, new laws might now force banks to sell distressed assets, therefore pushing prices even lower.”
The other main factor driving economic recovery is Cyprus’ upgrading by rating agencies Standard and Poor, and Fitch, based on better-than-
In terms of sales, the districts of Limassol, Larnaca and Famagusta record an annual increase of 19%, 10.2% and 20%, respectively. Meanwhile, Nicosia and Paphos record decreases of 2.2% and 33.6%, respectively, as reported by the Central Bank of Cyprus (CBC) based on figures from the Department of Land and Surveys. Sales to Cypriot buyers however remain rather low and record a decrease in the same period, reflecting the local economic situation and access to liquidity.
“Although property prices continue to record a decline throughout Cyprus, it’s encouraging to see investments from foreigners on the incline, signalling a changing trend. As demand continues to increase in the market, together with an already stagnation in the supply of new developments, prices will naturally follow to increase,” continues Kaloyirou.
Some property markets in Cyprus have already shown a slight increase in price index. Paphos, typically popular to foreign buying source markets such as the UK, has recorded an increase of 1.2% in apartment prices in Q1 2014.
“Of course there is still a long way to go with economic recovery. The main message that should be taken here is that the Cyprus property market is recovering, albeit slowly, and that buyers will now find excellent property deals in a market sure to improve and provide a good return.