Glistening seas, attractive cities, and entrepreneurship make Cyprus real estate a prime choice for investment. However, you should know the location and market before investing or buying. Here, we learn about Cyprus real estate and reveal top tips about investing in property!
Key takeaways
The Cyprus economy is robust; with excellent locations and high demand, realty is a good investment idea.
A lot depends on your plans and investment time horizon. Realty is a steady income source but an illiquid asset.
You will need the services of a real estate agent and a lawyer and, if you are a third-country national, permission from the Council of Ministers.
Economy Matters
Good news for buyers and investors: the Cyprus economy is doing well.
The European Commission’s Economic Forecast for Cyprus (15 May 2023) notes improvement despite challenges. The GDP is expected to grow from 2,3 in 2023 to 2,7 (% yoy) in 2024, and unemployment to fall from 6.9 to 6,5 (%).
The International Trade Portal of the Lloyd’s Bank (October 2023) records the expected rise in GDP in billions USD: from 30,86 (2023) to 32,34 (2024).
Also, the Central Bank of Cyprus, in its Economic Bulletin (June 2023), identifies a positive trend and resilience.
Why?
There are many reasons to invest in Cyprus properties, including
A price rise, recorded by the Central Bank of Cyprus for 2023 Q2 and by RICS (the Royal Institute of Chartered Surveyors) for 2023 Q3. There is increased demand, especially for apartments. The cities with the greatest demand are, in order, Nicosia, Limassol, Larnaca, Paphos and Famagusta. Rental values are up.
According to the Real Estate Agents Registration Council, the sector has reported a transaction value of EUR 1,7 billion for the first trimester of 2023.
Sales to foreigners are increasing, as the Central Bank of Cyprus reports.
Cyprus is a perfect place to relocate: sunny climate, relaxing lifestyle, low crime, and short distances.
Cyprus is a member of the European Union, providing social, political, and economic stability.
The Constitution guarantees civil liberties and human rights.
Costs are lower than in other parts of the EU.
There is a high-quality education system, a private health sector, and a general health system (GeSy).
The Cyprus economy is vibrant, supported by an excellent system of services, infrastructure and professional or skilled personnel.
Where?
Location is key when buying or investing. Location and type of property set the level of income the property generates. Cyprus offers various desirable locations, including the seafront, city centre, suburbs, countryside, villages and mountains.
The seafront properties are the most expensive. Still, seafront bungalows and plots are cheaper and only rise in value.
The city centre is excellent for apartments and office space. It is always in demand.
You can find anything from apartments to villas in the suburbs, with prices to fit most budgets.
Properties in villages and the countryside are in demand, though you must commute if you work in the city.
Choosing a location depends on your lifestyle and needs.
Factors to consider are centrality, closeness to amenities, characteristics of the neighbourhood, and future development. Consider property size, whether it is easy to make changes and physical condition. It is advisable to have a professional check before you choose.
How?
EU citizens can buy without restrictions, but third-country nationals (TCNs) need permission from the Council of Ministers. This is a procedure a lawyer can do.
Therefore, you will need the services of professionals: a lawyer and a real estate agent.
The lawyer will:
Draft the contract of sale.
Get all necessary permissions.
Protect your rights.
The real estate agent will:
Help you choose a location according to your budget and plans.
Advise on the Cyprus market.
Negotiate an agreement with the seller.
The process:
Once you choose, your lawyer will conclude the sale.
You or your lawyer will accompany the seller to the Lands District Office to register the sale and issue the title deeds.
Tip!
Do not sign anything before talking with your lawyer.
Investing and permanent residence
Importantly, investment can result in a permanent residence permit for TCNs. You must invest in new property worth at least EUR 300,000 plus VAT. You need a guaranteed annual income of EUR 50,000 from abroad, an extra 15,000 for your spouse and 10,000 for each dependent child.
Top Tips
Investing in real estate is advantageous. Time magazine explains it gives you a steady and additional cash flow with long-term appreciation. There are tax advantages because you deduct mortgage interest and expenses. Portfolio diversification spreads risk, with real estate performing well when other assets don’t.
However, real estate is highly illiquid (takes time to sell), costly (maintenance fees) and is a long-time financial commitment.
What are the best ways to invest? Time and Fortune magazines suggest
Buy a rental property. For TCNs, this will depend on permission from the Council of Ministers. Renting out gives you income but needs time and attention: repairs, late payments, and unruly tenants.
House hacking: rent a room in your house (see above for TCNs).
House flipping: buying a house to renovate and resell. You will need a team of experts and cash, however.
Invest in REITs (Real Estate Investment Trusts), companies which raise funds to invest in real estate. This is a safer option than direct real estate investment.
Investing in your home. However, Forbes Advisor recommends caution. While living in the house, you pay maintenance and repairs, taxes, insurance and possibly a mortgage.
Can I buy and sell properties in Cyprus?
Yes, though, you need to get a real estate agent’s license. EU citizens may apply, but it will depend on the type of residence permit and funds if you are a TCN.
The bottom line
There are pros and cons in realty investment. Cyprus is an excellent option because of its stable economy, demand for real estate and high quality of life. Before starting, consider your options and research the market with the help of professionals: a lawyer and a real estate agent.
Disclaimer
This blog post briefs you on the details and prospects for realty investment in Cyprus and ways to invest in real property. It cannot take the place of personalised advice from a professional. It is not meant as professional advice and carries no liability.
