According to some Cyprus property agents, the country is putting queues at ATMS and disappearing cash deposits firmly behind itself as property sales begin to rise across most cities. The question remains though – does this make Cyprus a good place to buy a second home in 2016?
Cyprus undoubtedly has its charms and offers something for everyone, whether you happen to like spending your time lazing on the beach or going off-road in the mountains. Unfortunately buying a second home in Cyprus needs a bit more careful consideration because you can’t simply leave it behind and hop on a plane home as many people hurt by recent mortgage rises have discovered.
According to Fitzgeralds, a property agent based in Cyprus, property sales saw a healthy increase on 2014. Better still, the increase in property sales was recorded across all districts apart from Larnaca, where there was a minor fall of 1%.
Nicosia was the front runner with sales increasing by 64% followed by Paphos (30%) and Limassol (28%). While Cyprus has rarely been on the radar for investors looking for a serious return on investment due to the volatility of house prices and a rental market that offers little when it comes to rental yields, the upturn in sales at least opens up the prospect that the recent slide in prices may be coming to an end.
Calling the bottom of a market is notoriously difficult, but when it comes to supply and demand, an increase in sales across the country will come as welcome news for those hoping to sell.
Paphos has long been one of the favourite locations for overseas property buyers due to its status as one of the main tourist destinations in Cyprus. Not surprisingly it has the largest number of private holiday homes registered to overseas owners in the whole of Cyprus.
According to Fitzgeralds, much of the recent rise in sales hasn’t come from overseas investors. Cypriot nationals outpacing the sales to overseas clients by a large margin. Paphos sales to overseas clients dropped to 35 units in October 2015 which was significantly less than the 50 units sold in the same month in 2014.
The background to recent signs of recovery in Cyprus stems from a more stable economic outlook which while not giving reason to pop open the Champagne, is at least looking better than it did 12 months ago. Unemployment remains at 15% which will continue to act as a brake on domestic demand in 2016.
Investors who may be tempted to invest in Cyprus property should consider whether Cyprus is worth the risk as property prices have continued to fall in the previous quarter, albeit at a slower pace than in 2014. RICS’ latest data indicates that Paphos, Larnaca and Famagusta are bottoming out. There has also been a modest increase in rents of 0.3% for apartments and 1.5% for houses in Cyprus as a whole.