Foreign buyers boost real estate sales to 15-year high

Sales of residential property in Cyprus reached a 15-year high in the second quarter of 2023, according to data released by the Central Bank of Cyprus.

The Residential Property Price Index (RPPI) rose by 1.5% in 2023Q2, up from 2.1% in the previous quarter. This increase was due to a 0.7% increase in house prices and a 3.1% increase in apartment prices.

Annualized real estate prices rose 7.4% in Q2 2023, up from 7.7% in the previous quarter, with apartment prices up 10.1% and house prices up 5.6%.

Demand for real estate in Cyprus continues to grow, with the majority of transactions being carried out by local buyers.

The increase in demand combined with a limited supply of new homes seems to be the driving force behind the growth' 'RPPI.

Despite an increase in the European Central Bank's key interest rate, which has reduced demand for mortgages, domestic demand for real estate remains on an upward trajectory.

The statistics also show an increase in the number of foreign buyers due to the "headquarters location policy" and an increase in the number of students and other investors in the real estate market.

Local demand seems to be linked to buy-to-let investments, known as buy-to-let.

Cyprus real estate sales contracts increased by 26.5% year-on-year, reaching a 15-year record.