The economic growth and fiscal performance of Cyprus continued to surpass expectations during H1 2018, with GDP expected growth of 3,6% for 2018, positioning Cyprus amongst the high accelerating economies of Europe.
Employment is growing across most sectors of the economy leading to a sharp reduction of the overall Cyprus unemployment rate. According to Eurostat data, in August 2018, Cyprus recorded the largest annual unemployment drop in Europe, shrinking to 7,5% compared to 10,5% in August 2017 and 8,1% for the Euro Area average.
In early Autumn 2018, the key international credit rating agencies upgraded the sovereign’s rating by one notch, while maintaining at the same time a positive outlook. Notably, in September 2018, Standard & Poor’s (S&P) upgraded Cyprus’ credit rating to investment grade, after maintaining a junk rating for almost seven years.
Increased activity levels both in terms of transactions and new permits for development, continued through to H1 2018, demonstrating the improved confidence in the property sector.
Interest from foreigners, and predominantly from non-EU buyers, continues to be the driving force for the market and is mainly fuelled by the continuation of the government schemes encouraging further investment in Cyprus.
In addition, increased levels of demand from domestic market and increased supply of new housing stock as a result of the reactivation of the private construction and property development sectors, contribute to the growth being observed.
Further growth in all property price indices was recorded during 2018, reflecting the increased demand and activity levels in the real estate sector.
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