Property
September 1, 2021
Reading Time: 4 min

House Prices Fall In Cyprus — A Unique Situation In The EU In 2021

Between January and March 2021, residential property prices in Cyprus fell by 5,8% compared with the same period in 2020. At the same time, prices in the rest of the EU countries increased. The average growth rate for the region is 6,1% to the cost of housing in the region.

Elena Ruda
Elena Ruda

Chief Development Officer in Immigrant Invest, lawyer

Cyprus Street with two-storey white houses

House Prices Fall In Cyprus - A Unique Situation In The EU In 2021

Statistics on house prices are provided by Eurostat, which takes into account the value of housing contracts concluded in the European Union over a selected period.

If we compare prices for the first quarter of 2021 with the first quarter of 2020, the biggest price increases were in Luxembourg, Denmark, and Lithuania. The smallest increase is seen in Spain, at just 0,9%.

Cyprus was the only EU country where house prices fell year-on-year and compared to the fourth quarter of 2020. Switzerland, Slovakia, and Malta also saw a slight fall in prices at the end of the first quarter of 2021. But the annual price increase in these countries was not affected by the fall.

Dynamics of house prices in EU countries

Country

Q1 2021
by Q4 2020

Q1 2021
by Q1 2020

eu-flag EU

+1,7%

+6,1%

cy-flag Cyprus

‑5,8%

‑5,8%

lu-flag Luxembourg

+4,3%

+17%

dk-flag Denmark

+5,8%

+15,3%

lt-flag Lithuania

+5%

+12%

cz-flag Czech Republic

+4,6%

+11,9%

nl-flag Netherlands

+4%

+11,3%

no-flag Norway

+4,5%

+9,7%

de-flag Germany

+1,5%

+9,4%

is-flag Iceland

+2,2%

+8,6%

at-flag Austria

+2,3%

+8,3%

bg-flag Bulgaria

+3,2%

+7,5%

si-flag Slovenia

+3,1%

+7,3%

se-flag Sweden

+3,1%

+7,2%

pl-flag Poland

+2%

+7,2%

be-flag Belgium

+0,9%

+6,7%

ee-flag Estonia

+6,6%

+6,6%

fr-flag France

+0,7%

+5,5%

pt-flag Portugal

+1,6%

+5,2%

mt-flag Malta

‑1,6%

+4,7%

hu-flag Hungary

+4,5%

+4,6%

hr-flag Croatia

+0,9%

+4,6%

ch-flag Switzerland

‑0,1%

+3,9%

fi-flag Finland

+1,1%

+3,6%

ie-flag Ireland

+1,6%

+3,1%

lv-flag Latvia

+1,3%

+2,8%

sk-flag Slovakia

‑1,2%

+2%

it-flag Italy

+1,1%

+1,7%

ro-flag Romania

+2,7%

+1,4%

es-flag Spain

+0,4%

+0,9%

How much costs housing in Cyprus in 2021

The price per square meter for a property in Cyprus ranges from €1,600 to €3,400. The price depends on the type of property and its location. In the first quarter of 2021, for example, apartment prices have risen in all regions of the country.

From €1,600

Price per square meter when buying housing in Cyprus

Regional map of Cyprus

The most expensive place to buy a flat is in the resort of Limassol: the average price per square meter in the region is €2,762

The Central Bank of Cyprus monitors the development of house prices in the country. In its quarterly reports, it takes into account the type of property and region and compares house prices with those of previous reporting periods.

Dynamics of house prices: Q1 2021 by Q4 2020

Region

Apartments

Houses

Nicosia

+0,5%

‑0,4%

Limassol

+1,1%

+1,6%

La aca

+1,9%

+0,3%

Paphos

+2,2%

‑1,5%

Famagusta

+3%

‑0,6%

Source: Central Bank of Cyprus

The Cyprus housing price index is also calculated by WiRE, an independent consultancy company that assesses the property markets in Cyprus and Greece. The company’s analysts noted a slight increase in apartment prices in Nicosia and Limassol from April to June 2021. But for the most part, house prices have either fallen or remained at the level of the first quarter of 2021.

Dynamics of house prices: Q2 by Q1, 2021

Region

Apartments

Houses

Apartments in resort areas

Country houses

Nicosia

+1,9%

+0,79%

No data

No data

Limassol

+0,97%

+1%

+2,44%

0%

La aca

0%

0%

0%

0%

Paphos

‑3,54%

‑3,61%

‑3,96%

‑3,8%

Famagusta

0%

0%

0%

0%

Source: WiRE Index, Q2 2021

Why Cypriot house prices have fallen

Residential property values in Cyprus have fallen so much year-on-year for the first time since the first quarter of 2014. At that time, it was caused by the economic crisis in the country. In 2020 and 2021, prices were affected by the pandemic.

The consequences of the pandemic. 30% of homes in the country are sold to foreigners who want to holiday in Cyprus or rent out properties to tourists. But when the borders closed, potential buyers from countries outside the EU were unable to come to Cyprus and choose a property to buy. Some property deals were frozen due to financial difficulties for the buyers.

The closure of the citizenship by investment program has also had an impact on the demand for Cypriot real estate. Until November 2020, wealthy people could buy a home in Cyprus and obtain an EU passport. From 2013 to 2018, investors invested around 360 million euros in Cypriot real estate — more than half of all investments under the program during that period.

55% of the income

Citizenship programs brought in real estate transactions

Is it worth investing in property in Cyprus now

Elena Ruda

Elena Ruda,

Chief Development Officer in Immigrant Invest, lawyer

Based on the dynamics of the property market in the region, the cost of housing in Cyprus is set to rise. This is why we recommend our clients to buy property now while there is still an opportunity to choose good properties at a lower cost. And then, when prices rise, the properties can be sold at a profit.

Construction in Cyprus continues at a pre-crisis pace. In the first five months of 2021 alone, the country issued 3,157 building permits — 30% more than in 2020.

Home sales are also on the rise: by July 2021, the property market was back to pre-crisis 2018 levels. The growth is mainly driven by home sales to Cypriots themselves: 71% of the country’s citizens and residents are satisfied with the quality of life and affordability of housing in the country. The government also provides incentives for the purchase of basic housing.

Demand from non-EU third-country nationals is falling. Between January and July 2021, foreigners bought 902 residential properties in Cyprus, down 15% on the same period in 2020.

Wealthy people prefer to own their own accommodation in Cyprus so that they can come and holiday on the island whenever they want. Properties are rented out most of the year. Rental yields average between 4,7% and 5,6% per annum. The average cost of renting a three-bedroom apartment is €963 per month.

From 4,7% p.a.

Rental income from Cyprus property lease

Investors can also obtain a permanent residence permit by purchasing a home on the island. The property must be worth at least €300,000. Cypriot residents have the right to live, do business, and study in the country without restrictions. If you have lived in the country for five years, you can apply for citizenship and gain freedom of movement to 176 countries, including Schengen, the UK, Japan, Hong Kong, and Singapore.

Immigrant Invest helps you get a permanent residence in Cyprus by investment. If you want to buy a property and become a resident of an EU member state, seek advice from experts in investment programs.