The market of real estate in Cyprus continues its steady growth: according to the Department of Lands and Surveys, from January to June 2023, 7,689 sales transactions were registered in the republic. Compared to H1 2022, sales increased by 22.8%, which was a record for the last 15 years.
Content:
- Is it worth buying real estate in Cyprus?
- Where is the best place to buy a property in Cyprus?
- Is it profitable to rent in Cyprus?
- We will help you buy real estate in Cyprus!
Is it worth buying real estate in Cyprus?
Buying a property in the Mediterranean island has a number of advantages and can be a great investment choice. If you are seriously interested in long-term investment, it will be useful to know the advantages of buying a property in Cyprus. The biggest ones are:
- Stable economy. The country is confidently recovering from the financial crisis, which resulted in the island becoming even more attractive for investors in recent years. There are now favourable conditions for the increase in property prices and stable rental income.
- Residence by investment programme. You have the opportunity to purchase an apartment priced at €300,000 and then apply for a long-term residence visa. Buying property to obtain a residence permit opens up new opportunities for travel, work, and education in Europe.
- Climatic conditions and nature. The island is famous for its pleasant Mediterranean climate, sunny weather almost all year round, and beautiful beaches, making it an attractive place to holiday and live.
- Income and corporate tax rates are low compared to other European Union countries. What’s more, there are no inheritance and capital gains taxes (the latter in case of exchange provided you use the gain made to acquire another property). You can also significantly reduce the amount of corporate tax due to additional incentives, which makes this place attractive for investors.
Let’s see which cities in Cyprus are the most popular with buyers in 2023, what makes these locations unique, and what advantages they offer.
Where is the best place to buy a property in Cyprus?
According to statistics from the island’s Department of Lands and Surveys, from January to June 2023, the most popular cities for buying a property were:
- Limassol: 2,576 property transactions, including offices, houses, and apartments in Cyprus, in H1 2023. The number of transactions is up 24.5% year over year.
- Paphos: the total number of transactions in H1 of this year was 1,776. Paphos ranks first among all settlements in year-over-year growth in the number of sales. Here, the figures increased by 36.1%.
- Larnaca: 1,451 units sold. Sales growth reached 29.3% compared to last year’s figures.
- Nicosia: the volume of transactions amounted to 1,416, which is up 2.8%.
To understand in which city it is better to buy an apartment in Cyprus, we will consider each of the above settlements in more detail.
So what is the best city to buy an apartment in Cyprus? Let’s take a closer look at each of the above locations to find out.
Limassol
If you are wondering, “Where is the best place to live in Cyprus?”, we recommend that you turn your attention to Limassol. This is the second largest city in the island nation, which is always popular with both tourists and investors interested in buying a villa in Cyprus in order to receive passive income.
This is the country’s industrial, cultural, and tourist hub and home to the largest port in the island. Local infrastructure facilities, including those related to the entertainment sector, are developing at an exponential rate. It is in Limassol that international companies prefer to open their branches, thanks to which investors from all over the world flock here.
Demand for residential and commercial property in this city is strong—and it does not depend on the season, as it happens in other areas.
The demand for rentals here is especially high from April to November, when the city welcomes a large number of tourists. However, house or apartment owners in Limassol can rent out their properties for most of the year. Year-round active cultural and business life, a well-developed infrastructure, and a variety of entertainment offerings and amenities provide a high return on housing in every part of the city.
The range of properties is wide—from studios and apartments in coastal residential developments to villas and private residences in gated communities.
What is important to know about the housing market in Limassol? Here is the average data:
- Return on investment reaches 10.75% per year.
- The cost of 1 m² in the centre is €3,300.
- The cost of 1 m² in other areas is €2,319.
- Rent on a 1-bedroom apartment in the centre is €1,545 per month.
- Rent on a 1-bedroom apartment in other areas is €1,141 per month.
Paphos
The second most popular settlement among investors is the ancient Paphos, a city with a rich history, set in a secluded location in the southwest of the island. In 2017, this place was recognized as a European Capital of Culture, where many interesting sights are concentrated. Paphos boasts the best golf course in Europe, stunning mountain scenery, and a national park.
Like other best cities in Cyprus to move to, Paphos offers its multiple advantages to homebuyers and expats, including:
- Thoughtful infrastructure created specifically for tourists, an airport within easy reach, and a quick return on investment.
- A variety of types of property: from inexpensive apartments to townhouses and villas on the coast. However, it is important to keep in mind that there are no high-rise buildings here.
- Well-developed healthcare and education systems. This place is great for singles and families alike, and there are many world-class educational institutions.
- Well-developed sports infrastructure, thanks to which many famous athletes come to train in Paphos.
- Mild climate. The temperature of the air and sea water is slightly lower than the national average, so it offers comfortable living.
- Compared to other locations in the island, Paphos is peaceful and cosy, since there are no megacities nearby.
- Many untapped business niches and low competition.
- Large British expat community.
- Tourist season that lasts from March to November.
Here is the average market data:
- Return on investment reaches 11.11% per year.
- The cost of 1 m² in the centre is €1,891.
- The cost of 1 m² in other areas is €1,948.
- Rent on a 1-bedroom apartment in the centre is €785 per month.
- Rent on a 1-bedroom apartment in other areas is €547 per month.
Housing prices in Paphos are lower than in Limassol, but the demand for purchases is not so high, so renting out here will be more profitable than selling.
Larnaca
Larnaca is another major city in the island nation, which investors often consider to buy real estate. Compared to other places on our list, Larnaca has a quieter and more relaxed pace of life. However, the demand for real estate here is not so high and is generally ambiguous: quite a lot of tourists come here, but Europeans are in no hurry to emigrate to Larnaca.
If you are planning to invest in Larnaca, it is important to bear in mind the following:
- Rental business generates more profit than resale.
- Residential property here is much cheaper than in Paphos and Limassol.
- The development market is not very active, so the likelihood of buying a property in the secondary housing market is higher than in a new building.
- The demand for purchases mainly comes from locals. Apartments, commercial real estate, and hotel properties are popular, but available villas are almost non-existent.
- The infrastructure here is well developed: there is a seaport, an airport nearby, and various cultural and entertainment facilities.
People mostly buy residential property in Larnaca for private use, rather than for business, since the returns here are not as impressive as in other locations in the island.
What is useful to know about the housing market in Larnaca? Here is the average data:
- Return on investment is 9.55% per year.
- The cost of 1 m² in the centre is €975.
- The cost of 1 m² in other areas is €1,307.
- Rent on a 1-bedroom apartment in the centre is €700 per month.
- Rent on a 1-bedroom apartment in other areas is €618 per month.
Nicosia
Nicosia is the capital of the republic and its geographical, political, and economic hub. The city is known for its impressive cultural heritage, gorgeous landscapes, and a variety of ancient monuments, which are known far beyond the island.
If you prefer an active lifestyle, then Nicosia will be right up your alley. It is the most populous European-style city, which has everything you need. Despite this, the capital has for many years been far from the most attractive option for property investors—all because of its remoteness from the coast. Tourists are drawn here exclusively by cultural heritage. When it comes to demand for rental housing, Nicosia is obviously inferior to more popular resorts.
What makes Nicosia attractive for investors and expats?
- People typically purchase commercial real estate here, since it provides more stable and higher earnings.
- Land plots are a very popular type of property. Buyers are mainly local and international companies.
- Nicosia offers high-quality education, so student apartments should also be considered as an investment option.
- You can try to build your business in entertainment and migration services niches, since the competition here is not as high as one might expect.
Here’s the average data about the local real estate market:
- Return on investment is 6.36% per year.
- The cost of 1 m² in the centre is €2,466.
- The cost of 1 m² in other areas is €1,750.
- Rent on a 1-bedroom apartment in the centre is €633 per month.
- Rent on a 1-bedroom apartment in other areas is €502 per month.
Is it profitable to rent in Cyprus?
Renting out a property can be a profitable investment. Here are a few reasons:
- Constant demand: Cyprus is a popular tourist destination, attracting many visitors from all over the world. High rental demand is a potential source of stable income. The average rental yield in the island is 7.6% per annum.
- Rental growth, especially during the holiday season
- Potential increase in prices: the cost of housing in the island, especially in popular areas, is rising. Therefore, you can sell the property at a higher price and make a profit.
It is important to note that rental success depends on many factors such as location, property condition, and market competition. We recommend doing niche research and consulting with local experts to get a more accurate estimate of potential returns.
We will help you buy real estate in Cyprus!
If you want to relocate or make an investment in local real estate, head over to the Cyprus-Real.Estate website. It contains only verified residential and commercial properties in popular locations in the Mediterranean island. For professional advice on search and sale, leave a request on the website. A real estate expert will tell you what profitable property to rent in Cyprus and arrange a safe transaction with the owner.