Based on the performance of the property market in Cyprus in 2015 and the beginning of 2016, Buy Home predicts that the sector’s transaction volume will not see a dramatic increase over the course of the year. According to statistics and trends, the price of prime assets will reach an all-time low and secondary asset requests, while the market will see an almost complete lack of demand for secondary assets.
According to a report put together by Resolute Asset Management, January 2015 to November 2015 saw transaction volume increase by some 9% when compared to the first eleven months of 2014. The report provides evidence of the influence the recession and subsequent bail-in had on the market, showing that transactions have decreased by 79% compared to the peak recorded in 2007.
Some 31% of the total transactions were recorded in Limassol – the highest on the island. The lowest was recorded in Famagusta with only 6% of the total transactions – this depleted statistic is thought to be a result of the district’s dependence local demand for holiday homes.
The prices of residential properties remain on a steady decline. Standing out from the crowd as the least vulnerable property type, residential houses have only dropped 4% in price since 2014 and 30% since the end of 2009.
These low transaction levels are expected to continue this year, with the first six months of 2016 set to see prime asset prices bottom out. Prices for secondary assets are expected to stabilise, although demand will be extremely limited.
Prime assets are thought to remain as the highest transaction volume and the government’s Naturalisation Scheme is set to encourage overseas buyers looking to purchase high-end residential properties (over €300,000).
Currently there are very few institutional investors in the market, and who are working are focused on earning income from existing investments, including large pieces of land which can be developed for tourism or grade A properties.