Russian:Why real estate is a safe investment

Inflation in Cyprus is declining but still high [6.7% in February]. Interest rates are low: 1.29% for household deposits and 1.27% for business deposits. In addition, there are no other investment opportunities as the Cyprus Stock Exchange shows low returns of about 2% per year and there is also the option of government bonds.

The inflationary effect is that it increases borrowing costs and at the same time increases the cost of production, which makes it more difficult to produce goods and services, including production in the real estate market, houses and apartments. Due to the war in Ukraine, the construction of new facilities has suffered and the issuance of building permits has decreased due to increased costs.

However, demand remains stable, especially for properties that are not new builds. According to the RICS general index, the average income from real estate in Cyprus in 2022 was:

• Apartments: 5.30%
• At home: 2.80%
• Stores: 5.70%
• Stocks: 4,30%
• Offices: 5,30%
• Vacation apartments: 5.40%
• Vacation homes: 2.70%

According to the results of sales in 2022, it is clear that the real estate market is strong and reaches an amount of almost 6 billion euros. According to the Real Estate Registry, the leading sales are apartments, as the total number of sales not only reached the 2018 level, but also exceeded it (20,799 sales in 2022 vs. 18,336 in 2018), with local buyers accounting for more than 80%, about 13% from the EU and 7% from other countries.

According to the latest Real Estate Registry report, the war in Ukraine has not had a significant impact on property values in 2022, while the number of sales contracts has increased by around 30% [10,347 in 2021 and 13,409 in 2022]. According to the RICS index for Q4 2022, apartments are the top seller in all sectors as they have the highest performance. This is particularly noticeable in Limassol, which has the highest RICS Index income.

Comparing 2021 with 2022, it is clear that income from apartments and houses has increased.

What is noteworthy is the clear increase in demand from foreigners in the Cyprus market between 2020 and 2022; sales to foreigners in 2020 amounted to 2,432, in 2021 to 3,057 and in 2022 to 4,123. In conclusion, regarding foreign buyers, it should be noted that Cyprus offers more than just a good investment in the real estate market. With a minimum investment of €300,000, foreign buyers can stay in Cyprus, securing a residence permit and being able to work, study and enjoy over 350 days of sunshine, as well as tax and other benefits. The extensive use of the English language is a great advantage.

Antonis Loizos FRICS - Antonis Loizos & Associates Ltd. - Real estate appraisers, real estate agents and real estate consultants.