As we move swiftly into the Summer season of 2022, we must look back on the facts and figures of 2021 and reassess our strategies and expectations. This article reviews the real estate market developments in Cyprus during 2021. All statistics and data are sourced from PwC’s 2021 Cyprus Real Estate Year in Review.
Unemployment rates drop slightly
Unemployment rates in Cyprus in 2021 averaged to 7.5%, dropping by 0.1% since 2020 and representing a 0.5% value below the EU average of 8%. This slight drop in unemployment demonstrates a slow but hopeful improvement in the quality of life of Cypriot citizens.
GDP increase
The GDP % in Cyprus sustained a 5,1% decrease in the height of the pandemic in 2020. However, the predicted 2021 GDP value reached a 4,8% increase, showcasing a nearly pre-pandemic level of recovery.
Residential market and land transactions
Cyprus’s residential property transaction value reached €2,4 billion in 2021, representing a 16% increase from 2020. As displayed in the graph by PwC below, the property transaction value has fluctuated dramatically over the last three years. Firstly, the seasonal buyers tend to lean towards the annual summer months of the year. Secondly, the transactions dramatically decrease in value in each strict pandemic lockdown period (April 2020, January 2021). Thirdly, the termination of the Cyprus Investment Program (CIP) has decreased the value of mainly residential transactions (foreigners can no longer buy their way into European citizenship through property investment in Cyprus). With all of these new hurdles factored in, it is evident that the Cypriot economy and real estate market have been put through the wringer but are making a steady recovery.
Foreign buyer transactions increase
In 2021, we saw a 24% increase in transactions from foreign buyers. Property sales by foreigners reached 3,691 in 2021, compared to 2,985 in 2020.
Transaction value increase
Cyprus’s total real estate transaction value reached €3.8 billion in 2021. This value marks a significant 26% increase since 2020, showing resilient signs of recovery. Limassol continues to lead with the highest value of real estate transactions on the island, followed by Nicosia.
Increase in property transactions
The overall number of property transactions increased by 32%, from 14.5 thousand in 2020 to 19.1 thousand in 2021. These numbers show a swift recovery of the economic and real estate market since the beginning of the COVID-19 outbreak.
Increase in number of new building permits
Despite the 11% pricing increase in building material prices, 2021 recorded a 17% increase in the number of new building permits issued. However, the permits recorded in 2021 reveal that the average value of developments was smaller than in 2020.
Summary
Overall, the real estate market statistics from 2021 highlight healthy growth from the economic tremor felt in 2020. The COVID-19 pandemic tested all aspects of the economy, and in 2020, we saw a significant drop in one of Cyprus’s primary national incomes, foreign buyers. However, many aspects and trends of collected data suggest a full recovery on its way to pre-pandemic levels, with a sliver of hope visible from 2021.
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