The real estate market in Cyprus underwent a positive change in recent years. Real estate growth followed two crises in the Cypriot real estate market, in 2008 and in 2016, which resulted in the collapse of the real estate market and to 70% property value loss. Consequently, the government of Cyprus decided to embark on advanced banking reforms aimed at protecting the economy and property owners in order prevent such collapses in the future.
About four years after the crisis new laws were legislated, followed by moderate growth in real estate prices and in demand (up to 10% annual growth).
After the enactment of a series of new laws and the opening of the market to foreign investors, the external investors gradually began to understand the potential of the Cypriot market, bringing about significant price increases of up to 30% and demand in the real estate market.
The result is that the current real estate market in Cyprus has the highest demand among foreign investors.
The current market can be described as follows:
A shortage of second-hand apartments.
90% of new apartments are sold “on paper” – before the construction stage.
High demand for long-term lease property (European workers that come to work in international companies).
High demand for short-term lease property (4 million tourists a year).
Continuous annual growth in the real estate market.
In recent years the economy of Cyprus boasts large investments in international projects such as marinas, skyscrapers, hospitals (Hadassah), golf courses and hotels.
All this, combined with the following data, have made Cyprus a desired destination for high-tech and finance companies, and for all those looking for the good life and a high quality of life.
The attractive tax policy in Cyprus includes a 12.5% company tax rate and low 20% capital gains tax.
In the real estate field, there are three basic principles for assessing investment profitability: price, return and taxation. In Cyprus you will find a distinct advantage with respect to these three principles.
An Israeli investor is entitled to receive European Cypriot permanent residency, which enables the investor and their family to enjoy the right to free movement in European Union countries, and seven years after receipt of residency to submit a request for citizenship. The minimum required investment amount is: €300 thousand plus VAT.
Property prices in Cyprus are relatively low compared to the high monthly rents, for the investor.
The population of Cyprus grew by 3.6% (compared to a population decline in Bulgaria of 6.3%, Greece of 3%, Georgia of 0.7%).
As Cyprus does not have heavy industry, but has a low taxation rate, international companies choose to locate their offices in Cyprus.
This invites international workers from all over Europe who want to rent apartments instead of buying.
Investing in Cyprus? What will you actually receive?
✦ Acquisition above €300 thousand – permanent residency visa
✦ First property – VAT discount (5% VAT rate)
✦ Property owners receive eased conditions in the process of opening a bank account
✦ Ownership of European property
✦ Protected property ownership from the State (no entity can seize the property, not even the State)
✦ Financing by a Cypriot bank (3.5% financing interest rate)