High-end property market declines in 2023 after year and a half of continuous growth

Cyprus’ high-end residential property market declined 9.3% in 2023 reaching €2b, in a correction that was expected following its active growth throughout 2022 and first-half 2023.

Cyprus Sotheby’s International Realty’s latest quarterly “INSIGHTS” report details the volume and value of Cyprus’ high-end residential real estate market for the full year 2023 and Q4 2023. It also provides insights into the sales of high-end real estate – that is, houses over €500,000 and apartments over €200,000 – by district.

“Cyprus’ high-end residential property market continues to demonstrate solid results,” Anastasia Yianni, CEO of Cyprus Sotheby’s International Realty, commented. “In 2023, it reached €2b, showing a 9.3% decline compared with the last year. The year 2022 was one of the most successful for the Cyprus property market in the past decade with impressive sales volume numbers as the post-Covid lethargy had ended. It was no surprise that after such an incredible growth we saw the market stabilising.”

The total value of real estate sold – including all types of properties, residential, commercial, land, and buildings – reached €4.4b in 2023. The sale of residential units (apartments and houses) totalled €3.8b (down 8% in year-on-year.

“While in Nicosia and Paphos we saw stable market results, in Limassol the market declined last year,” Yianni explained.

Last year, the real estate sector was also impacted by legislative initiatives, she added. “In 2023, we saw the adjusted regulations for permanent residency by investment in Cyprus, a new law on reduced VAT for first homes and a new citizenship framework for highly skilled professionals.

As for the year ahead, Cyprus Sotheby’s International Realty expects the real estate market to continue to stabilise. “We have a moderate outlook for the high-end property market for 2024 and expect a stable demand for residential property from both local and international buyers supported by traditional Cyprus market drivers such as attractive lifestyle and business opportunities with sunny climate, safety, reasonable cost of living, favourable tax systems, the island’s prospects as an international business centre and one of the top investment destinations in Europe,” said Yianni.

In other key insights include in Cyprus Sotheby’s International Realty’s “INSIGHTS” report:

• According to the Cyprus Land Registry, as of the end of December 2023, the total number of registered property sales since the beginning of the year reached 15,567 showing a 16% increase y-o-y. In Q4 2023, the number of registered contracts of sales reached a total of 4,048, up 6.6% year-on-year.
  
• The attractiveness of Cyprus’ real estate market among foreign buyers continues to grow. The share of overseas sales composed 44.3% of total property sales contracts for the full year of 2023. Since the beginning of the year, foreign property sales totalled 6,900, demonstrating an increase of 16% year-on-year driven by demand from non-EU citizens. The total number of property sales to non-EU citizens almost doubled (+46%) compared with 2022. In Q4 2023, the overseas sales decreased by 10.2% to 1,611 comparing with Q4 2022.
  
• As of the end of December 2023, the number of residential property sales totalled 14,566 showing a 4.8% decrease year-on-year. In Q4 2023, the number of residential sales contracts of sales reached a total of 2,758, down 33.4% year-on-year.
  
• Cyprus’ residential real estate market decreased to €3.8b during 2023, recording an 8% annual drop. The residential market actively grew throughout 2022 and first-half 2023, so the current correction was expected.
  
• In 2023, the number of transactions on Cyprus’ high-end residential property market totalled 3,849, representing an increase 3.7% year-on-year. By value, the high-end residential property market declined by 9.3% year-on-year to €2b. The high-end properties account for almost half of the residential market (46.8%) in terms of transaction value. The decline in value was mainly attributed to the results of the last quarter. The high-end residential property market was not very active in the last three months. The number of transactions totalled 637 with only 112 transactions involving high-end houses. By value, in the last quarter, the high-end residential property market dropped by half (-52%) year-on-year and reached €328.6m.
  
• In 2023, both houses and apartments showed a decrease year-on-year both by volume (8.6% and 2.7% respectively) and by value (8.8% and 7.4%).
  
• Meanwhile, the high-end apartments segment grew by volume by 2.7% year-on-year to 3,172 transactions and high-end houses segment increased by volume by 8.5% year-on-year to 677 transactions. However, by value, the high-end apartments and houses segment declined by an annual 7.2% and 10.3% respectively.
  
• In Limassol, since the beginning of the year the number of registered transactions of high-end property reached 2,051, representing a decrease by 5.7% year-on-year. By value it declined by 17.4% year-on-year. In Q4 2023, the local high-end market decreased by half year-on-year in terms of volume to 322 transactions and almost by 59.7% year-on-year in terms of value to €180.5m.
  
• In Paphos, in 2023, the number of transactions in the high-end market reached 662, up 17% year-on-year, while the value of the market grew slightly by 1.3% year-on-year to €382.5m. In Q4 2023, the local high-end market dropped by half year-on-year both by volume to 87 transactions and by value to €57.7m.
  
• In Nicosia, in 2023 the high-end local market was basically stable comparing with the previous year, showing a minor increase both by volume and value.

Access the full report here