Apart from the holiday celebrations, the end of every year is a time to look back and reflect, in business as much as in our personal lives. And for anyone involved in the two – related – sectors of tourism and real estate in Cyprus, 2016 was certainly good year.
While it is widely acknowledged that the Cyprus economy is well on its way to recovery, the pain of the past lingers, and to date, many have resisted the desire to get excited. Now, however, after the third consecutive year of increased activity in the property market, even the most sceptical observers are admitting that the light at the end of the tunnel is visible and growing brighter every month.
Numbers don’t lie
This optimism is triggered by concrete figures – because numbers don’t lie. And the figures in this case are the ones published by the Department of Lands and Surveys, which records the number of property sales contracts deposited in Land Registries across Cyprus.
If we compare the total number of property sales in 2015 and 2016, the annual increase is a solid 43%, a year-on-year rise not seen in a decade. A closer look at the monthly figures will further explain why December delivered such a welcome surprise.
MONTH 2015 2016 Increase / Decrease
Jan 321 327 2%
Feb 325 501 54%
Mar 452 539 19%
April 381 514 35%
May 405 474 17%
June 464 657 42%
July 496 625 26%
Aug 301 451 50%
Sep 385 556 44%
Oct 463 634 37%
Nov 446 651 46%
Dec 513 1134 121%
Total 4952 7063 43%
A number of factors contributed to this astounding increase, including government incentives such as exemption from capital gains tax and reduced transfer fees. In part, the transactions registered were not actual sales, but debt-to-asset swaps agreed between owners and their bankers. Either way, such activity generates a market movement that builds momentum, which in turn reinforces confidence and generally stimulates the economy and consumer psychology.
What is even more encouraging than the figures themselves is the fact that this increased market activity is not limited to Cypriots. The total number of properties with registered contract of sales by foreign buyers hit 1813 – that is 34% higher than the equivalent figure for 2015.
Although all the districts enjoyed their fair share of increased transactions (by both domestic and foreign buyers), some parts of the island were more popular than others.
As in the past, Limassol topped the list in terms of the number of properties sold, as well as in terms of increase compared with 2015, marking a year-on-year rise of 59%. Paphos registered an increase of 40%, Nicosia 38%, Famagusta (Ayia Napa / Protaras) 35%, and Larnaca 27%.
At this point, keen investors are taking a step back to look at the bigger picture. Yes, sales are up – indeed, for the third year running. So clearly, the trend is steady, with no reversal projected by even the most conservative analysts. That said, this revived market movement is still 45% lower than when it was at its best.
The good news is that further improvements are expected. And as demand increases, prices are likely to rise. So, the message that is written between the lines is equally clear: Now is a good time to invest in property in Cyprus!