Record property sales in Cyprus are the highest in 15 years.

local buyers. Rising demand, combined with a limited supply of new homes, seems to be the driving force behind rising real estate prices.

Although the European Central Bank has raised key interest rates in recent years, which has reduced demand for mortgages, domestic demand for real estate is still on an upward trajectory. Construction costs have also stabilized this year.

The rise in the number of foreign buyers is attributed to the framework of the 'foundation policy' - the Strategy to attract companies to intensify or expand their operations in Cyprus - and the increasing number of students and other investors in the property market.

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Local demand seems to be driven by investment for rental purposes, so''called buy-to-let'.

Cyprus real estate sales contracts showed a year-on-year increase of 26.5% in the second quarter of 2023, marking a 15-year high. The number of properties sold to foreign buyers was particularly high, up 38.5% year-on-year, while sales to local buyers rose 17.9%.

But as a result of the ECB rate hike, new home loans fell 2.9% year-on-year in the April-June 2023 period. The mortgage rate also increased and averaged 4.28% in the same period.

The number of residential building permits issued in Q2 was down 13% year-on-year, indicating a decline''construction activity.

The Cyprus real estate market continues to grow overall, with limited supply and increasing demand.