Paphos & Limassol Residential Real Estate Market Sales Rising!
As we have discussed in our previous blog, the Real Estate Market in Cyprus has been on a rise despite the global financial state with the Russia-Ukraine War going on as well as 40-year high inflation rates that have caused a rise in prices in everything we use on a daily basis.
Despite these factors, it has been noted that now there is the highest demand for real estate from both locals and foreign buyers that have not been seen since 2020 when the government ended the disgraced citizenship for an investment scheme.
The big influx of buyers has been linked to UK ex-pats looking for their retirement homes, and Israelis looking to buy properties as permanent residency property or for their own investment.
There has also been an influx of clients from European Countries such as Germany as well as Poland and Hungary have been showing great demand in moving over to Cyprus.
The most sales have been happening in Paphos and Limassol over any other cities in Cyprus, but the majority of sales have been mostly to Non-EU residents who have been mostly looking to obtain their residency in Cyprus.
- Paphos alone has seen a tremendous 80% increase in sales in the first 2 Quarters of 2022 over the same period in 2021. For foreign sales, Paphos has seen an insane 113% increase over last year!
- This can be very confusing as amidst a global crisis the real estate market is at a high and with no signs of slowing down in 2022.
- There has also been high demand from Russian Speaking Clients as well as people from Ukraine for buying properties.
Another factor that can explain this boom in the market, due to the global financial situation, people do not want to leave their money in the bank as inflation will eat out the value.
This means that people now lose money by saving it! As an alternative people seek to invest their money in assets in order to fight inflation and maintain the value through hard assets like Houses, Commercial properties, etc.
Furthermore, other than wanting to preserve their wealth, there have also been other factors that have been causing this increase in home prices, rent costs, as well as construction costs.
One of these factors is the change in regulations and rules regarding the VAT tax issued on Real Estate Transactions.
The key changes that are expected:
- Fewer Homes will be entitled to a reduced 5% VAT tax, from houses under 200m2 of buildable area, the regulation will start to apply for only 140m2 and under.
- Any Property over 140m2 will have a 19% VAT tax for every m2 above that size.
More details regarding this topic are very well discussed by Kyriacos Kyliaris In the Following Article: