Real estate prices in Cyprus are rising despite the challenges.

The real estate market continues to show resilience and is on track to become the best year since 2008, according to a report by Danos/BNPRE Group.

The report covering the second semester of 2023 shows a 23% increase in sales compared to the second quarter of the same year, reaching a record high of 7,689 sales over the past 15 years. The total number of real estate sales transactions for 2023 is expected to exceed 15,000, surpassing the previous record of 13,409 set in 2022.

In the second quarter, there were 5,974 transactions totaling 1.52 billion euros.

In the comments for Financial Mirror, Panos Danos, CEO of Danos/BNPRE Group, noted that the real estate market in Cyprus is showing significant recovery despite the economic uncertainties caused by the energy crisis, the conflict between Russia and Ukraine, and the recent conflict between Israel and Hamas.

"The real estate market is showing resilience, but there are also increasing challenges that should not be underestimated," said Danos. "Real estate significantly contributes to the economy of Cyprus, and it is important for the government to find ways to support and maintain its momentum," Danos added.

He noted that both the value and the volume of transactions have decreased compared to the first quarter, urging sector participants to remain vigilant. The annual transaction volume remained at the level of the corresponding period in 2022, while the value of sold real estate significantly increased to 1.2 billion euros.

Nicosia and Famagusta are the only areas where an increase in real estate prices was observed in the second quarter compared to the first quarter. Despite a decrease in the volume of transactions, Nicosia recorded a value of 299.8 million euros, while Famagusta saw an increase in both value (59.7 million euros) and the number of transactions (303).

The main driving force behind the market remains apartments, attracting interest from foreign companies relocating their operations and staff to the island, especially in coastal areas. Data indicates that throughout the year, 9,000 apartment purchase transactions were conducted, representing a 29% annual increase.

The housing market in Cyprus continues to grow, fueled by strong domestic demand and returning foreign investors. The national housing price index increased by 7.42% (5.41% adjusted for inflation) year-on-year by the second quarter of 2023, with a quarterly increase of 1.46% (1.15% adjusted for inflation) in the second quarter of 2023.

Overall, the real estate market in Cyprus remains dynamic and is driven by both domestic and foreign demand.