PwC Cyprus has launched its latest Cyprus Real Estate Market publication, which provides insights on the performance of the sector during 2022.
According to PwC’s in-depth analysis, the total value of real estate transactions reached a record-high of €5,2 billion during 2022, recording an annual increase of 27%. In volume terms, properties transacted during 2022 reached 22.500, up 12% from the previous year and even surpassing pre-pandemic 2019 levels by 31%.
During the year, Limassol, Larnaca and Paphos experienced double-digit annual increases in terms of the volume of transactions (18%, 23% and 31%, respectively). On the other hand, the districts of Nicosia and Famagusta experienced marginal drops of 6% and 1% respectively.
Apartment transactions have been a driving force for the market
Undoubtedly, the driving force of the market relates to apartments with the value of transactions reaching €2,1 billion during 2022, a 42% increase compared to 2021. Demand appears to have been fuelled by a growing appetite from companies of foreign interests to relocate their operations and staff on the island, mainly in the coastal areas, and was further supported by a resilient domestic segment. In total, PwC data indicate that 9.000 apartments were transacted during the year, recording a 29% annual increase.
The high-end residential property (≥ €1,5mln) segment remains active
The termination of the CIP programme (effective 1 November 2020), led to an observed shrinkage of activity levels in the high-end residential property segment (≥ €1,5mln). During 2022, a partial recovery of this segment was observed, with a total of 220 transactions of high-end residential properties recorded, demonstrating a 36% annual increase and signalling that this segment remains active.
Perhaps the most resilient part of the market relates to the residential property segment in the range of €100k – €300k
Residential properties between €100k – €300k reached 7.600 in volume during 2022, representing a 19% annual growth and a 41% increase compared to pre-pandemic 2019. This is mainly a result of strong demand for primary residences and increasing investment activity in private-rented housing (particularly apartments), combined with the growing levels of foreign demand in the context of relocations to Cyprus.
Continuous hike in the cost of material prices
Despite the growing levels of demand for real estate, as evident by the transaction data presented, building permits decelerated during 10M 2022 (latest available), recording a 5% annual drop. This may be largely attributed to the continuous hike in the cost of material prices, which was sustained throughout 2021 and 2022, with prices growing by 30% in a period of 2 years, disrupting market balances and particularly the private/single housing segment.
Commenting on the Report, Partner of PwC Cyprus, Constantinos Constantinou, stated:
“In an environment which at the wider geopolitical level is dealing with several challenges and crises, the Cyprus real estate sector proved to be particularly resilient, exceeding expectations in transaction activity levels observed during the year, fuelled by the ongoing demographic shifts observed on the island “
To download the Cyprus Real Estate Market Report of PwC, click here.