CYPRUS REAL ESTATE MARKET - FIRST HALF IN REVIEW | H1 2020 NOVEMBER 2020 - PWC CYPRUS
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First Half in Review | H1 2020
Cyprus Real
Estate Market
November 2020
Cyprus Real Estate Market B
Contents 1 Foreword 3 2 H1 2020 – The Key Highlights 4 3 Redefining the Real Estate Market: The Day After 6 4 Cyprus Economy update 10 5 Transaction Volumes / Investment Activity levels 20 6 Sale Contracts statistics 26 7 Foreign transaction activity 28 8 High-end residential property segment (≥€1,5mln) 30 9 Construction Activity 36 10 PwC Real Estate Advisory Services 42 11 PwC in Cyprus 43 2 PwC Cyprus
Foreword
We are determined to stand by you during these
very challenging times. At PwC, we have a
diverse team of professionals with backgrounds
ranging from engineers, management
consultants, property valuers, planning experts,
data analysts, finance experts, and merger
and acquisition specialists. Combined with our
strong international network, we are able to
offer solutions in support of our clients’ needs,
assisting in the transformation of the sector and
helping so that the real estate industry and, in
turn, the economy can go back to their normal
operating rhythm.
We are delighted to present our latest PwC Cyprus Real
Estate Market publication. This publication, which comes in an Evgenios C Evgeniou
unprecedented period for Cyprus and the global economy, as CEO
a result of the COVID-19 pandemic, provides insights about PwC Cyprus
the behaviour of the Cyprus economy in general following
the spread of the virus, and presents key real estate market
developments, focusing on the performance of the sector
during the 1st half of 2020 (H1 2020).
In addition to the adverse effect of the pandemic on the real
estate market, the suspension of the Cyprus Investment
Programme (“CIP”), effective from 1 November 2020, is
presenting a new challenge for the market and the industry
in general. The developments have prompted an urgency
to pursue a much needed sector reform and for the market
participants to set new priorities and strategies. Recognising
that going back to the old-normal is not a viable option, in this
publication we present some thoughts / recommendations
as regards possible transformational changes and provide
options as regards new strategies and priorities.
Cyprus Real Estate Market 3
2
H1 2020 -
The Key Highlights
Real GDP % Cyprus exhibited strong economic growth for the fifth year in a row in 2019 (3,2%).
However, following the global outbreak of COVID-19, real GDP is expected to
IMF Forecasts contract by 6,4% by the end of 2020 and assuming a gradual recovery materialises
in the coming months, the economy is projected to turnaround in 2021.
(6,4%) - 2020(F)
Despite the expectation for sharp increases in unemployment rates, Cyprus
Unemployment unemployment remained relatively stable until H1 2020 (7,4% by June 2020),
mainly attributed to the introduction of Government policy measures to safeguard
8,0% - Sep 2020 jobs. Unemployment rate reached 8,0% by September 2020 and, according to IMF
forecasts, it will remain stable until the end of 2020 (EU average: 8,9%).
In April 2020, the Cyprus Government issued a 30-Year and 7-Year bond, raising a total
of €1,75bn (total bids €2,6bn), proving that despite uncertainty, international markets
continued to place confidence on the Cypriot economy. Since 2018, key international
In April 2020, Cyprus credit rating agencies (with the exception of Moody’s) maintained Cyprus’ sovereign
Government raised €1,75bn rating to investment grade, although Fitch changed the outlook of Cyprus from positive
to stable in April 2020.
through issue of new bonds
%
Lending market Drop in new mortgage loan facilities largely relates to the impact of the
New mortgages decrease by COVID-19 pandemic and more specifically the lockdown and restriction measures
(18%) during H1 2020 and which were in place from March to May 2020. A 4-year subsidy of interest rates
(up to 1,5%) for new housing loans (up to €300.000) was introduced by the Cyprus
introduction of interest rate Government in order to boost demand for new mortgages.
subsidy
4% The sector’s contribution to the Cyprus economy continues to grow (4% during 12
Growth in the GVA contribution of months to 30 June 2020), highlighting the importance of the sector in the overall
economy. The latest developments as regards the CIP suspension and the disruptive
the Real Estate & Construction
nature of the pandemic, imply a broader economic uncertainty in the short to medium
sector (12M to 30 June 2020) term.
4 PwC Cyprus
€1,2bn transaction value Transactions of
69% of transaction value
(55% drop compared to high-end residential
relates to residential
H1 2019) properties (≥€1,5mln)
properties
plummeted by 78%
during H1 2020
• Mainly attributed to the unusually • The value of transactions for
high influx of transactions from apartments and houses reached
foreigners during Jan-May 2019 €828mln during H1 2020 (3.500 • Perhaps the most badly hit
and the adverse effects from the units transacted) segment during H1 2020
spread of the pandemic in 2020,
which exacerbated the prevailing • Land transactions reached • 51 high-end residential
reduced levels of activity €257mln, mainly comprising land properties acquired recording a
within residential planning zones 78% drop compared to H1 2019
• Pre-Lockdown months (55% of total land value)
(Jan-Feb): Activity levels in terms • Given that the high-end
of transaction volume were residential property segment
similar to the respective months is almost directly linked to the
of 2019, while transaction value 44% drop in CIP, its suspension creates
dropped by c.21% foreign transaction uncertainty with regards to
the future of this segment and
activity
• Lockdown months highlights the need to re-focus
(Mar-May): Physical and and transform the real estate
travelling restrictions to execute market
• Even before the pandemic,
transactions almost entirely transactions appeared reduced
wiped out any new transaction compared to the first months of
executions from foreigners 2019
35% drop in value of
• During lockdown, the inability of new building permits
foreign buyers to travel to Cyprus issued
Double digit drops
exacerbated the prevailing
in transaction value reduced levels of activity
across all districts • Number of building permits
dropped by 7% during H1 2020
• Coastal districts of Limassol and (-35% in value terms)
Paphos (predominantly driven
by foreign demand), decreased • The drop observed may be
by 65% and 61% respectively attributed to the lockdown
compared to H1 2019 measures, which inevitably
affected the private and public
• Nicosia (predominantly driven sector procedures required to
by local demand), experienced issue permits
the lowest hit (31% drop)
• Largest concentration of new
• Limassol continues to absorb permits relate to Nicosia (33%),
the majority of transactions closely followed by Limassol
(33% of total transaction value)
Cyprus Real Estate Market 5
3
Redefining the Real Estate Market:
The Day After
The COVID-19 pandemic, and the disruption it has brought to the economy, as well as the suspension of the CIP,
prompted an urgency to pursue a more radical transformation of the sector, and for the industry participants to revisit
their strategies and priorities. It is inevitable that there is a need to consider differentiated concepts and products that
are sustainable and fit for the future.
This section briefly outlines various recommendations which could be considered in assisting this transformation
and re-focus of the market, recognising that given the prevailing conditions and developments, going back to the old-
normal is not a viable option.
Follow the demographics: Housing for the elderly
According to the latest Eurostat data, Cyprus demonstrates one of the lowest fertility rates across the EU and a
relatively high life expectancy (82,9 years on average). As a consequence, based on the latest EU forecasts, by 2070,
one in three Cypriot residents is expected to be 65+ years old, while at the same time by 2070, 10% of the country’s
population is expected to be >80 years old.
Demographic shifts are expected to shape the housing market and pose enormous challenges to the country’s
healthcare system in the years to come. A significant portion of the elderly population ends up living alone or in
couples in their three/four-bedroom family homes where they have raised their families. These houses tend to be
large in size (47% larger compared to the EU average), difficult to maintain and do not have the amenities to support
their daily needs.
The ageing demographics of Cyprus pose the need to develop housing products which are tailored to the needs of
the elderly. The adoption of planning incentives to encourage the development of specialised Elderly Housing and
Assisted Living communities and the introduction of tax incentives to attract specialised operators are expected to
induce private sector initiatives in this direction. At the same time, such investments could lead to potential savings in
the public healthcare system and could even create opportunities for cross-service investments such as rehabilitation
centres and medical tourism projects.
6 PwC Cyprus
Focus on concepts with economic multiplier effect:
Composite real estate projects
Composite real estate projects have a multiplier positive impact on the economy and can
support sustainable growth. Therefore, incentives should be provided for the development
of composite projects, in line with the demographic and other demand factors, that have
a multiplier impact on the economy. Such projects could include among others, affordable
living, education and student housing etc. These projects should include, in addition to
the real estate component, other uses and facilities such as retail space, health centres,
recreation areas etc which will help other sectors of the economy, having in this way a
multiplier positive impact on employment and the economy at large.
Incentives for such projects could take the form of additional building density, tax
incentives both for the investors and the buyers/users, relaxations etc. Projects that fall
in this category should also have a priority in terms of licencing given the multiplier effect
that these projects could have on employment and the economy. Finally, similar incentives
should also be provided for projects that are friendly to the environment and promote the
sustainable development of the country.
Incentivise Adaptive Reuse of Buildings / Repurposing of
old buildings
Our city centres are crowded with buildings which are commercially and occupationally
obsolete. At the same time, there is increasing demand for space, resulting in an urban
sprawl. Developing our cities inwards is a strategy that would allow town centres to remain
vibrant without the need of additional infrastructure and further significant investments.
This can be achieved by repurposing existing buildings away from uses now seen as
increasingly obsolete and therefore less profitable, towards real estate that fits the way
people use buildings today.
The trend towards repurposing existing buildings has been a key topic of the latest PwC
Surveys (Emerging Trends in Real Estate Europe) with major institutional investors citing
that repurposing of assets has become not only viable but a highly sought-after option for
many investors. In particular, on the basis of the PwC Survey findings, over the coming
5 years, repurposing assets from one sector to another is on the agenda for nearly 75% of
institutional investors across Europe. It is also expected that in the prevailing volatile
market, it will be critical for investors going forward, to ensure that the assets they invest
in, can be repositioned and repurposed.
Government schemes could be considered that would incentivise the repurposing of existing
buildings, to address the ever changing needs of occupiers and rejuvenate city centres.
Cyprus Real Estate Market 7
Affordable housing
Housing affordability has been an evolving issue over the years, and it is expected that it will deteriorate if it is not
tackled effectively. The need for greater investment in social infrastructure, such as affordable housing, across Europe,
was highlighted in the latest PwC Survey (Emerging Trends in Real Estate Europe 2021), with the COVID-19 pandemic
exacerbating this issue further.
Based on Cyprus published statistics, c.70% of the Cypriot housing stock is owner-occupied, a large proportion of
which is subject to a mortgage or loan. The debt burden of such households reaches almost €3,5bn. Even though the
ESTIA scheme could limit part of the problem, households defaulting against their housing loans are not declining.
The introduction of an effective housing policy is considered critical. Policy measures in this framework should induce
developments and housing projects for lower income tiers of the society. Such policies could be scaled to different
locations across the island, tailored to their demographic characteristics. Using examples of alternative housing policies
that exist in different parts of the world, such measures could include setting rents in housing schemes that are lower
than average rents in the local area (i.e. capping rents as a percentage of the market rent, regulated by the local
authorities), property downsizing (i.e. developing housing units which are smaller than the minimum threshold size,
stipulated by the town planning regulations), rent-to-buy schemes, repurposing of vacant properties into affordable
housing concepts or even relaxation of planning and development regulations.
Looking at the UK case study, any new residential development is required, under Section 106, to dedicate a minimum
number of units of the overall development as affordable housing units in different forms, such as affordable rented and
shared ownership (i.e. co-ownership with local authorities).
Sustainability in the built environment
According to the European Commission, c.75% of the EU building stock is energy inefficient and in order to meet the
EU climate and energy objectives, the current rates of renovations should at least double. In dealing with this issue, the
EU is investing heavily in grants or loans that help push technology and best practice in the sector and also supports
and finances energy efficiency projects through the European Investment Bank (EIB). In addition, to boost building
renovation, the European Commission has announced its intention to launch the new ‘renovation wave’ initiative, as part
of the European Green Deal with the aim to increase the rate of renovation of existing buildings by developing financing
possibilities, promoting investments in buildings and pooling renovation efforts. Like all Member States, Cyprus will receive
an allocation of Green Deal funding through regional development mechanisms and existing EU programmes.
At the same time, increasingly more investors realise that social and environmental factors have an impact on the value of
a real estate property and there is growing interest in energy efficient and sustainable buildings. In fact, the trend towards
energy efficiency and the sustainability of buildings is a key topic in the latest PwC Survey (Emerging Trends in Real Estate
Europe 2021), whereby nearly 8 out of 10 survey respondents think that energy efficiency, carbon emissions and climate
adaption will increase in importance in their portfolios in 2021, and the number is higher still over a five-year horizon. When
it comes to impact investing, cutting the carbon footprint of real estate is regarded as by far the most effective measure for
the industry to make a difference.
In order to tackle the issue of energy inefficient buildings and enhance impact investments in Cyprus, economic and
other forms of incentives, could be provided to property owners, developers, individuals and other organisations. These
incentives and mandates could relate to the use of land for energy production, tax incentives on capital expenditure
involving energy efficiency in building construction and renovation, solar energy generation from government building roofs
or along motorways, or even a green building density incentive programme and an expedited planning permission scheme.
8 PwC Cyprus
Accelerate digitalisation and digital transformation of real estate
procedures
The real estate market has a lot to benefit from digitalisation initiatives. For example, currently
executing a transaction of immovable property at the Land Registry is a time-consuming and
cumbersome procedure. There is a high administrative burden and inefficiencies involved when
dealing with the various Local Authorities and Land Registry functions, as regards settlement
of municipal charges, granting of tax clearances, payment of transfer fees etc. The COVID-19
outbreak and the restrictions imposed, further highlighted the need for consolidation and
digitalisation of these procedures.
Digitalisation would simplify the transaction process and reduce costs for all participants. At
the same time, it would also enhance transparency, making the Cyprus property market even
more appealing for foreign investors. Digitalised and more efficient processes would slim down
operating costs for financial institutions and servicers, reducing the burden of the management
and handling of large real estate and loan portfolios.
Implementation of a centralised Leasehold Registry
Implementation of a centralised Leasehold Registry, through which landlords will be required to
register lease agreements of privately owned residential and commercial properties in Cyprus
and to update such information on an annual basis. This would complement the sound Land
Registry system, providing elevated transparency not only in terms of the registered ownership
of immovable property, but also in terms of the use and occupancy. Maintaining transparency is
increasingly important for the real estate market, a sector which continues to attract a growing
allocation of capital from foreign investors. The proposed mandatory registration process would
also serve to alleviate tax evasion on rental flows, primarily in the private housing sector.
CyprusCyprus
Real Estate
Real Estate B
MarketMarket 9
4
Cyprus
Economy update
Contraction of the Cyprus economy during 2020, followed by an anticipated recovery in
2021 depending on the pandemic and the adverse effect on the local and global economy. +3,2%
Cyprus exhibited strong GDP growth for the fifth year in a row in 2019 (3,2%) maintaining its position as 2019 Real
one of the fastest growing economies in the EU.
GDP %
However, the global outbreak of COVID-19 has completely changed the picture, with the Cyprus
economy heading into a profound recession in 2020. The adoption of travel restrictions, lockdown
(6,4%)
measures and the interruption of all non-essential businesses since mid-March 2020, had a major impact
on the Cypriot economy. According to latest IMF forecasts, real GDP is expected to contract by -6,4% by
the end of 2020 (compared to -7,6% being the forecasted EU average).
Even though the speed and rate of the economy recovery remains highly uncertain,assuming a gradual
recovery materialises in the coming months, the economy is projected to turnaround in 2021, with IMF
2020 (F)
estimates indicating a recovery. Real GDP %
Cyprus Vs European Union Real GDP (% change)
8% 6,7%
IMF
6%
4,4% 4,1%
Forecast
3,4% 3,2%
4%
2,1% 1,9%
1,7% 3,0%
2%
2,0% 0,4% 2,5% 2,3%
0,0% 2,1% 1,7%
0%
(0,7%) (1,9%)
-2%
(3,4%)
-4%
(6,4%)
-6%
(6,6%)
-8%
(7,6%)
-10%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020(F)
European Union Cyprus
*Note: The 2020 real GDP % forecast represents the latest available IMF estimates
Source: IMF (World Economic World Outlook Database – October 2020)
10 PwC Cyprus2019 (Actual) GDP % (constant prices) 2020 (Forecast) GDP % (constant prices)
Ireland 5,9 Lithuania (1,8)
Estonia 5,0 Ireland (3,0)
Hungary 4,9 Poland (3,6)
Malta 4,9 Finland (4,0)
Poland 4,1 Bulgaria (4,0)
Romania 4,1 Denmark (4,5)
Lithuania 3,9 Sweden (4,7)
Bulgaria 3,4 Romania (4,8)
Cyprus 3,2 Estonia (5,2)
Croatia 2,9 Netherlands (5,4)
Slovenia 2,4 Luxembourg (5,8)
Slovak Republic 2,4 Germany (6,0)
Denmark 2,3 Latvia (6,0)
Czech Republic 2,3 Hungary (6,1)
Luxemburg 2,3 Cyprus (6,4)
Latvia 2,2 Czech Republic (6,5)
Portugal 2,2 Slovenia (6,7)
Spain 2,0 Austria (6,7)
Greece 1,9 Slovak Republic (7,1)
European Union (27) 1,7 European Union (27) (7,6)
Netherlands 1,7 Malta (7,9)
Austria 1,6 Belgium (8,3)
France 1,5 Croatia (9,0)
United Kingdom 1,5 Greece (9,5)
Belgium 1,4 France (9,8)
Sweden 1,3 United Kingdom (9,8)
Finland 1,1 Portugal (10,0)
Germany 0,6 Italy (10,6)
Italy 0,3 Spain (12,8)
Source: IMF (World Economic World Outlook Database – October 2020)
Cyprus Real Estate Market 11Unemployment
Despite the expectation for sharp increases in unemployment
rates as a result of the effects of the COVID-19 pandemic, Cyprus
unemployment remained relatively stable until H1 2020 (7,4%
by June 2020). This was mainly attributed to the introduction of
Government policy measures which aimed to safeguard jobs, mitigate
unemployment hikes and protect the most vulnerable groups of society.
The real effects of the recession became more evident by September
2020 with the unemployment rate reaching 8,0% (which is still below
the forecasted Euro Area average of 8,3%).
Depending on the spread of the pandemic, there is uncertainty
regarding the unemployment rate from 2021 onwards.
Unemployment rate in Cyprus (2010 - September 2020)
Unemployment rate in Cyprus (2010 - September 2020)
18%
2014 - September 2020 drop: 810bps IMF Forecast
15,9% 16,1%
16% 8,9%
15,0%
14% 13,0%
8,0%
11,9%
12% 11,1%
10%
8,4%
7,9% 8,0%
8% 7,1%
6,3% 8,0%
6%
4%
2%
0%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Sept-20* 2020
Cyprus Euro Area**
Source: IMF (World Economic World Outlook Database – October 2020), Monthly data September 2020: Eurostat
*The September rate represents the seasonally adjusted rate, estimated by Eurostat
** Euro Area relates to the 19 countries using the Euro as they national currency
12 PwC CyprusCyprus Real Estate Market 13
Cyprus’ sovereign rating
Since 2018, key international credit rating agencies (with the
exception of Moody’s) maintained Cyprus’ sovereign rating to
investment grade.
Although Moody’s was the only rating agency that maintained
a below investment grade rating for the country (Ba2), in
September 2019, it changed the outlook of Cyprus’ rating from
stable to positive.
On 3 April 2020, following the COVID-19 outbreak, Fitch changed
the outlook from positive to stable in order to account for the
effects of the pandemic, but maintained the country’s investment
grade on the expectation of a relatively strong economic recovery
in 2021. In September 2020, S&P affirmed Cyprus’ rating of BBB-
with a stable outlook, despite the fact that the economy is in the
midst of the pandemic’s negative effects.
03.04.2020
Source: Trading Economics, PwC Research
14 PwC CyprusCyprus Government bonds
Yields of 10-Year Government bonds (which were priced at 4,03% at issued date, October 2015) have fallen to 0,25% by the end of
2019 (with c. 6 years remaining to the expiration of the bond).
During the first months of 2020, Cypriot sovereign bond yields remained stable before they started experiencing some volatility in
early spring, in line with other European bonds, demonstrating early signs of the pandemic. In April 2020, the Government of Cyprus
issued a 30-Year and a 7-Year bond, raising a total of €1,75bn (€0,5bn and €1,25bn respectively), to cover financing needs created
by the fiscal impact of the COVID-19 pandemic. Total bids for the aforementioned bonds reached €2,6bn proving that despite the
prevailing uncertainty, international markets continued to place confidence on the Cypriot economy.
By the end of April 2020, sovereign bond yields peaked with yields of 10 and 15-year bonds reaching c.2,1% and c.2,3%
Cyprus Government Bond Yields
Cyprus Government Bond(%) (2018-2019)
Yields (%) (2018-2019)
respectively. Following the announcement of the European Central Bank intervention (18 March 2020) regarding the Pandemic
Emergency Purchase Programme, yields eased during the following months, reaching c.0,9% and c.1,2% for the 10 and 15-year
bonds respectively, by June 2020.
Cyprus Government Bond Yields (%) (2015 - June 2020)
4,5% 4,5%
4,0% 4,0%
3,5% 3,5%
3,0% 3,0%
2,5% 2,5%
2,0% 2,0%
1,5% 1,5%
1,0% 1,0%
0,5% 0,5%
0,0% 0,0%
10-Year Government
10-Year Government Bond
Bond (issued Oct(issued
2015) Oct 2015) 10-Year Government
10-Year Government Bond
Bond (issued (issued
Sep 2018)Sep 2018)
15-Year Government
15-Year Government Bond
Bond (issued Feb(issued
2019) Feb 2019) 30-Year Government
30-Year Government Bond
Bond (issued (issued
May 2019)May 2019)
7-Year Government
7-Year Government Bond
Bond (issued (issued
April 2020)April 2020)
Cyprus Government Bond Yields of new bonds issued during 2020 (%)
Mid-yield (%) as 3,0%
Bond at 30 June 2020
2,5%
20-Year Government Bond
1,371% 2,0%
(issued January 2020)
1,5%
10-Year Government Bond
(issued January 2020) 0,915% 1,0%
0,5%
30-Year Government Bond
(issued April 2020) 1,750% 0,0%
30/01/2020 29/02/2020 31/03/2020 30/04/2020 31/05/2020 30/06/2020
7-Year Government Bond 20-Year Government Bond (issued Jan 2020) 10-Year Government Bond (issued Jan 2020)
0,690%
(issued April 2020) 30-Year Government Bond (issued April 2020) 7-Year Government Bond (issued April 2020)
Source: Bloomberg
Cyprus Real Estate Market 15Key drivers of the housing market:
Household disposable income, mortgage interest rates and
access to financing
Increased employment combined with Household disposable
Household disposableincome
income& &
mortgage interest
mortgage ratesrates
interest
a low inflation environment during the
past years, led to an increase in the
real disposable income of households 4,99% 5,05% 5,16% 5,15%
4,73%
in 2019 (9,7% increase). Although data €20,2
on real disposable income has not been €19,6
€19,4 3,71%
made available for 2020, according to €19,3
€18,9 3,36%
the European Commission report (dated 3,16%
€18,4 2,87%
Spring 2020), private consumption is 2,39%
expected to decline by more than the 2,17%
GDP anticipated contraction (i.e. -6,4%) €17,6 2,17%
€17,2
with the shock cushioned somewhat €16,9 €16,9
-ve outlook
outlook
by the support by the Government to
households and, to a smaller extent,
by the expected increase in domestic
-ve
tourism.
At the same time, interest rates on
housing loans continue to decline. By 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 H1
30 June 2020, mortgage interest rates 2020
Mean equivalised disposable income (€'000s) Mortgage interest rates
dropped to 2,17% (recording a c.22 bps
drop compared to 31 December 2019).
Source: Central Bank of Cyprus and Cystat
Note 1: The equivalised disposable income is the total disposable income of a household, divided by its respective
equivalised size
Note 2: The mortgage interest rates correspond to the average rates of greater than 5 years in terms of housing loans
16 PwC CyprusLending Market
New mortgage loan facilities experienced a drop to €395mln during H1 2020, compared to €481mln during H1 2019 (c.17,9%
drop) demonstrating that flows of additional credit for housing purchases remain low. This drop largely relates to the impact of
the COVID-19 pandemic and more specifically the lockdown and restriction measures which were in place from March to May
2020. In the short to medium term, banks are keen on granting new loans to viable borrowers; however, it is expected that
they will remain extra cautious given the uncertainty around the medium-term repayment capabilities resulting from reduced
revenues and net worth. At the same time, the 4-year subsidy of interest rates (up to 1,5%) for new housing loans (up to
€300.000) was introduced by the Cyprus Government, in order to boost demand for new mortgages.
New mortgage loan facilities (€/mln) 18%
New mortgage loan facilities (€/mln) H1 2020 Vs H1 2019
New mortgage loan facilities (€/mln)
€3.500 €481
€3.500 €395
€3.000
€3.000
€2.500
€2.500
€2.000 H1 2019 H1 2020
€2.000
€1.500
€1.500
€1.000
€1.000
€500
€500
€0
€0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 H1
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 H12020
2020
Source: Central Bank of Cyprus
Cyprus Real Estate Market 17Real Estate - One of the main pillars of the Cyprus
economy
Gross Value Added (GVA) contribution by sector (12 month
period to 30 June 2020)
Gross Value Added (GVA) contribution by sector (12 month
The Real Estate and Construction sector period to 30 June 2020)
traditionally constitutes one of the key pillars Public admin,
of the Cyprus economy. The Real Estate and defence,
education &
Construction sector constituted 17% of the Other sectors
healthcare 20%
21%
country’s GVA during the 12 month period to 30
June 2020.
Real estate &
construction 17%
Tourism, trade &
transport 24%
Until the first half of 2019, the Real Estate Financial,
and Construction sector experienced a rapid Source: Cystat professional &
administrative
growth, reaching 11% growth in GVA during services 19%
the 12 months to 30 June 2019. Although this
growth decelerated amid the pandemic, the % Growth in GVA of key sectors for the 12 month period to 30 June
sector’s contribution to GVA experienced a 2020
6%
4% growth during 12 months to 30 June 2020 4%
3%
and remained the fastest growing sector,
4%
highlighting the importance of the sector in
the overall economy. Taking into consideration 2%
the latest developments as regards the CIP (0% )
suspension and the disruptive nature of 0%
the pandemic, there is broader economic
uncertainty in the short term. -2%
-4%
-6% (7% )
-8%
-10%
Real estate & Public admin, Financial, Tourism, trade &
construction defence, professional & transport
education & administrative
healthcare services
Source: Cystat
18 PwC CyprusCyprus Real Estate Market B
5
Transaction Volumes /
Investment Activity levels H1 2019 H1 2020
% increase /
decrease
No. of properties transacted 8.800 5,600 (36%)
Cyprus Real Estate
Transaction value (€bn) 2,7 1,2 (55%)
sector at a glance
The growth in real estate transaction activity observed over the past years was reversed in the first half of 2020. The total volume and
value of properties transacted in Cyprus through the DLS (both in terms of contracts of sale and sale transfers) recorded a significant
drop during H1 2020 compared to H1 2019, mainly attributed to the following:
1. During January to May 2019, the market experienced an influx of transactions from foreign buyers mainly arising from the
anticipation of the revisions in the CIP investment criteria (which were effected from June 2019 onwards).
2. The spread of the pandemic, which resulted in businesses and individuals deferring significant investments in the face of physical
restrictions and increased economic uncertainty, exacerbating the prevailing reduced levels of activity, observed in H1 2020.
Specifically, the total number of properties transacted during H1 2020 reached 5.600, compared to 8.800 in H1 2019, representing
a 36% decrease. In transaction value terms, an even sharper drop was observed, with total transactions reaching €1,2bn during H1
2020, indicating a drop of 55% (H1 2019: €2,7bn).
No. of properties transacted
5,0 17.100 18.000
15.500 15.800
4,5 16.000
€bn value of properties transacted
€ 4,4bn
4,0 € 4,5bn € 4,2bn
14.000
3,5 12.000
12.000
3,0 € 3,4bn
10.000
2,5 8.100
7.100 8.000
2,0 5.900 5.600
H1 2019
€ 1,9bn 6.000
1,5 € 1,7bn € 1,2bn
1,0 4.000
€ 1,1bn
2020
H1
0,5 2.000
0,0 -
2013 2014 2015 2016 2017 2018 2019 H1 2020
Transaction value (€bn) No. of properties transacted
Source: The transaction activity analysis was based on data from the Department of Lands and Surveys (DLS) relating to contracts of sales and sale transfers, extracted on 2/10/2020.
Any differences with previous publications relate to amended Land Registry records and discrepancies between the date of agreement and respective filing date.
Note: The above figures do not include: (i) Debt for Asset Swap transactions (DFAS), (ii) transaction of real estate through the sale of company shares or fund units (Share Deals) and
(iii) any other transactions not filed or adequately recorded at the DLS
20 PwC CyprusA. Pre-Lockdown B. Lockdown C. Post-Lockdown
A. Pre-lockdown (Jan - Feb) Month on (January-February) (March-May) (June)
Activity levels in terms of month %
transaction volume were relatively growth (4%) 4% (46%) (82%) (59%) (5%)
in line with the respective months
2.000 1.837
in 2019. However, in terms of 1.694
# properties transacted
transaction value, a drop of c.21% 1.377
1.466
1.500 1.322 1.295
was observed. 1.192 1.140 1.232
1.000 795 756
B. Lockdown (March - May)
Cyprus had a very strict lockdown 500 307
from March to May 2020, with
very limited ability of people to 0
Jan Feb Mar Apr May June
move and commute (airports
were closed, people had to stay
H1 2019 H1 2020
at home etc.). Apart from the
physical restrictions to execute
transactions, the travelling Month on
restrictions imposed, almost month %
entirely wiped out any new growth (21%) (22%) (58%) (87%) (75%) (16%)
transaction executions from 643
700,0
foreigners. 590
€mln value of properties transacted
600,0
500,0 463
C. Post lockdown (June) 408
Activity levels in terms of 400,0 327 317
258 250
transaction volume were 300,0
193 211
relatively in line with the same 200,0 147
81
month in 2019 (5% decrease 100,0
in June 2020), while in terms of 0,0
transaction value a 16% drop was Jan Feb Mar Apr May June
observed during June 2020.
H1 2019 H1 2020
Jan Feb Mar Apr May June
5%
0%
(5%)
(10%)
(15%)
(20%)
(25%)
Throughout H1 2020, transaction (30%)
(35%)
value experienced a more acute (40%)
(45%)
drop when compared to the number (50%)
(55%)
of transactions, demonstrating that (60%)
units transacted were on average of (65%)
(70%)
a lower value. (75%)
(80%)
(85%)
(90%)
Transaction value (% change) Transaction volume (% change)
Source: The analysis was based on data from the Department of Lands and Surveys (DLS) relating to contracts of sales and sale transfers, extracted on 02/10/2020
Note: The above figures do not include: (i) Debt for Asset Swap transactions (DFAS), (ii) transaction of real estate through the sale of company shares or fund units (Share Deals) and (iii)
any other transactions not filed or adequately recorded at the DLS
Cyprus Real Estate Market 21% Change in volume and value of properties
% Change inper
transacted volume and(H1
district value of properties
2019 Vs H1 2020)transacted
All districts experienced double-digit drops in per district (H1 2019 Vs H1 2020)
the volume and value of properties transacted 0%
during H1 2020. The coastal districts of
Cyprus such as Limassol and Paphos which (10%)
are markets predominantly driven by the (20%)
foreign segment, demonstrated a decrease (19%)
in transaction value terms of 65% and 61% (30%) (26%)
respectively compared to H1 2019. (31%) (31%)
(40%)
(36%)
Nicosia district, which is a market predominantly (50%)
(48%) (47%)
driven by the local segment, experienced the
lowest hit during H1 2020, in transaction value (60%) (56%)
terms (31% drop compared to H1 2019). (70%) (61%)
(65%)
Nicosia Limassol Larnaca Famagusta Paphos
Transaction volume (% change) Transaction value (% change)
Source: Department of Lands and Surveys (DLS), PwC Analysis
Transaction
value (€mln) H1 2019 H1 2020
Nicosia 434 300
Limassol 1.143 401
Larnaca 280 178
Famagusta 161 71
Paphos 664 257
Total 2.681 1.206
Despite the fact that Limassol experienced the Transaction volume and value by district (H1 2020)
biggest hit in terms of transaction activity, it Nicosia Limassol Larnaca Famagusta Paphos
continues to absorb the majority of transactions
in the sector, representing 33% of transaction
value and 26% in terms of number of properties 17%
17% 21% 25%
sold during H1 2020. 31%
31%
7%
6%
Nicosia made up 31% of total number of
transactions recorded, although in terms of value
# #
6%
€
it comprises 25%, reflecting that on average 19% 15%
19%
transactions are of a lower value compared to 33%
26%
Limassol. 26%
Paphos ranked third in terms of transaction value Nicosia Limassol Larnaca Famagusta Paphos
during the first half of 2020, with 21% of the total
Source: Department of Lands and Surveys (DLS), PwC Analysis
share of the market.
22 PwC Cyprus4%
Transaction value by type 21% 25%
21%
37%
During the first half of 2020, the transaction value of the residential property 6%
6%
€
sector reached €828mln, representing an overall decrease of 60% compared
to H1 2019. In total 3.500 residential units were transacted (2.200 apartments 15%
and 1.300 houses), demonstrating an overall decrease of 42%, implying that 33%
32%
the units transacted were on average of a lower value compared to H1 2019.
The residential property sector made up 69% of the total value of transactions
in the sector during H1 2020 (apartments: 37%, houses: 32%), compared to a Apartments Houses
77% contribution during H1 2019. Commercial Land
Other
Source: Department of Lands and Surveys (DLS),
PwC Analysis
Transaction value per month (2019 - H1 2020)
Average monthly Average monthly transaction value Average monthly • Following the revision of the
Revision
transaction value before
pre-lockdown and post revision of transaction value CIP criteria (which took place in
of CIP
revision of CIP criteria
CIP criteria of May 2019 during lockdown May 2019) and until the period
Transaction value per month (2019 - H1 2020)
criteria
of lockdown (March 2020), the
Transaction value per month (2019 - H1 2020)€285mln
€486mln €140mln average monthly transaction
700
700 value amounted to €285mln,
representing a 41% decrease
600 compared to the 2019 period
600 preceding the revision of CIP
criteria.
500
500 • During lockdown months
(March-May 2020), the
Value (€/mln)
400
average transaction value was
Value (€/mln)
400
significantly reduced to €140mln.
300
300 • In the midst of lockdown months,
April 2020 was the month with the
200 lowest transaction value records
200 across all asset classes.
100
100
-
-
Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20
Residential Commercial & Other Land
Source: Department of Lands and Surveys (DLS), PwC Analysis
Cyprus Real Estate Market 23Apartments Houses
H1 2019 H1 2020 % increase / H1 2019 H1 2020 % increase /
decrease decrease
Transaction value (€bn) €1,2bn €0,4bn (67%) Transaction value (€bn) €0,9bn €0,4bn (56%)
No. of properties transacted 4.100 2.200 (46%) No. of properties transacted 2.100 1.300 (38%)
Apartments sold
No. of properties per price bucket
transacted No. of properties
Houses sold pertransacted
price bucket
21 60
>1mln >1mln
4 14
29 91
500k-1mln 500k-1mln
6 45
88 286
250k-500k 250k-500k
40 165
1.969 739
0-250k 0-250k
1.052 485
- 500 1.000 1.500 2.000 2.500 - 100 200 300 400 500 600 700 800
H1 2019 H1 2020 H1 2019 H1 2020
Note: The
In order
number
to avoid
of transactions
statistical discrepancies,
included in thethe price
above
bucket
analysis
chart includes
differ fromonly
thesingle Note: The
In order
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to avoid
of transactions
statistical discrepancies,
included in thethe price
above
bucket
analysis
chart includes
differ fromonly
thesingle
unit transactions
total transactionswith
presented
100% share.
in the table
Accordingly,
above, asthethe
number
chart of
includes
transactions
only single
in theunit
chart unit transactions
total transactionswith
presented
100% share.
in the table
Accordingly,
above, asthethe
number
chart of
includes
transactions
only single
in theunit
chart
differ from thewith
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100%
aboveshare
as the
(to avoid
chart excludes
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aforementioned categories. differ from thewith
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aboveshare
as the
(to avoid
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discrepancies).
aforementioned categories.
H1 2019 H1 2020 % increase / H1 2019 H1 2020 % increase /
decrease decrease
Median €101k €104k 3% Median €197k €189k (4%)
Average €141k €124k (12%) Average €310k €248k (20%)
H1 2019 H1 2020 % increase / H1 2019 H1 2020 % increase /
H1 2019 H1 2020 %decrease
increase / H1 2019 H1 2020 %decrease
increase /
decrease decrease
Median (€0-€500k) €100k €103k 3% Median (€0-€500k) €175k €170k (3%)
Median (€0-€500k) €100k €103k 3% Median (€0-€500k) €175k €170k (3%)
Average (€0-€500k) €116k €114k (2%) Average (€0-€500k) €194k €186k (4%)
Source: Department of Lands and Surveys (DLS), PwC Analysis
Source: Department of Lands and Surveys (DLS), PwC Analysis
24 PwC CyprusFields Plots
H1 2019 H1 2020 % increase / H1 2019 H1 2020 % increase /
decrease decrease
Transaction value (€bn) €0,2bn €0,1bn (32%) Transaction value (€bn) €0,2bn €0,1bn (37%)
No. of properties transacted 1.200 1.200 0% No. of properties transacted 900 600 (33%)
1%1%
2%
Land transactions by planning zone 3% 0,3%
0,3%
1%1%
2% 7,7%
7,7% 14%
14%
3% 6%
6%
Land transactions during H1 2020 reached
€257mln, corresponding to 21% of transaction
# # €
47% 17%
value of the sector. 17%
47%
46%
55% of the total value of land transactions 46%
relate to land within residential planning 55%
55%
zones, whereas 14% comprised land within
agricultural planning zones. In value terms,
land transactions recorded a 35% drop Agricultural
Agricultural Agricultural Residential
Residential
Residential Residential
compared to H1 2019. CommercialCommercial & Special
& Special Zones Zones Industrial
Agricultural
Commercial & Special Zones
Industrial
Industrial
Tourist Tourist Commercial & Special Zones Other / Non-Identified
Industrial
Other / Non-Identified
Tourist Other / Non-Identified
Tourist Other / Non-Identified
Source: Department of Lands and Surveys (DLS), PwC Analysis
Cyprus Real Estate Market 256
Sale Contracts
statistics
o. of contracts of sale filed at the DLS per district (2010 - H1 2020)
2.000
No. of contracts of sale filed at the DLS per district (2010 - H1 2020)
No. of contracts of sale filed at the
12.000 Growth of 2,75x
0.000 DLS per district (2010 - H1 2020) 10.366
10.000
9.242 25%
8.598 8.734
8.000 24% 26%
25%
19% 24%
8.000 7.018 7.063 24% 6%
19% 24%
6.269 7% 6%
10%
19% 25% 7% 15%
6.000 10% 7%
19%
6.000
16% 24% Peak of Cypriot 4.952 25% 7% 15% 15%
10% 15%
16% 10% 24% economic crisis 4.527 6%
15%
15%
6%
14% 9% 3.767 25%
14% 9% 19%
4.000 27% 25% 19%
4.000
26% 17% 27% 34%3.272
26% 17% 7%
7%
34%
31%31% 37%
7%
7% 36% 37%
30% 30% 22%
22%
36% 22% 22%
6% 6% 18%
18% 7% 7%
26% 26% 35%35%
2.000 2.000 16%16% 17% 17%
31% 32%
32%
31%
No. of
30%contracts
30%
of sale26%filed at the DLS per
28%district
28% (2010 - H1 2020) 17%
19% 19%
29% 29%
26% 24% 17% 17%
12.000 24% 19% 17% 15% 15% 17% 25%
19% 17% 15% 15% 25%
-
- 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 H1 2020
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 H1 2020
Source: Department of Lands and Surveys (DLS) Nicosia Limassol Larnaca Famagusta Paphos
10.000
Nicosia Limassol Larnaca Famagusta Paphos
25%
(41%)
No. of real estate contracts of sale
24%
8.000
The reduced19%
transaction activity in the market
(H1 2019 vs H1 2020) 24%
6%
is also evident by the number of sale contracts 6.000 5.560
recorded at10%
the DLS during
19% H1 2020, which 25% 7%
H1
7% 202015%
6.000
reached 3.272, representing a 41% drop 24%
5.000
25% Drop
15% in no. of
16%
compared to H1 2019. 10% 6%
15%
sale contracts
4.000 7%
14% 9% 25% 3.272
19%
filed at the DLS
4.000 27% 14% (H1 2020 Vs H1
26% 17% 34%
3.000 7%
31% 7%
22%
36% 2019)
37%
30% 22% 7%
6% 18%
26% 2.000 36% 17%35%
2.000 16%
31% 32% 29%
30% 28% 1.000
26% 19%
24% 17% 17%
19% 17% 18% 15% 25%15%
- -
Source: Department of Lands and
2010 2011 2012 2013 2014 H1 2019 2015 2016
H1 2020 Surveys (DLS)
2017 2018 2019 H
26 PwC Cyprus Nicosia Limassol Larnaca Famagusta Paphos
Nicosia Limassol Larnaca Famagusta Paphos% Growth in no. of real estate sale contracts per district
Geographical Distribution of Transactions (H1 2019 Vs H1 2020)
% Growth in no. of real estate sale contracts per district
According to the DLS, all Cyprus districts (H1 2019 Vs H1 2020)
%
experienced double-digit drops in sale growth (18%) (53%) (27%) (38%) (50%)
contracts filed at the DLS during H1 2020
compared to H1 2019. Specifically, coastal 2.500
districts of Cyprus such as Limassol and 1.987
Paphos demonstrated decreases of 53% and 2.000
50% respectively. 1.416
1.500
1.013 934
1.000 830 772 713
Nicosia district, which is a market 563
predominantly driven by the local segment, 372
500 232
experienced the lowest hit on sale contracts
-
filed at the DLS during H1 2020 (18% drop Nicosia Limassol Larnaca Famagusta Paphos
compared to H1 2019).
H1 2019 H1 2020
Source: Department of Lands and Surveys (DLS), PwC Analysis
Geographical distribution of real estate sale
Overall, the majority of sale contracts contracts per district (H1 2020)
recorded at the DLS during H1 2020
were in Limassol (29%), followed by
Nicosia (25%) and Paphos (22%).
25% 7%
Nicos
Nicosia Famagusta
Theia
17%
image part with relationship ID rId8 was not found in the file.
22%
Larnaca
29%
Paphos
Limassol
Source: Department of Lands and Surveys (DLS)
Cyprus Real Estate Market 277
Foreign
Transaction Activity
During H1 2020, a total of 1.391 properties in Cyprus were acquired by foreigners (in terms of sale contracts filed at the DLS),
compared to 2.482 properties acquired by foreigners during H1 2019, representing a 44% YoY decrease. Looking at the monthly
acquisitions of properties by foreign buyers, it is evident that even before the pandemic (January-February 2020), transactions
appeared reduced compared to the respective months of 2019, and during lockdown, the decrease in foreign transactions
exacerbated the prevailing reduced levels of activity.
Approximately 68% of properties acquired by foreigners in H1 2020 relate to Non-EU buyers (H1 2019: 70%). In Larnaca, 79% of
foreign transactions relate to non-EU buyers. The respective share of non-EU resident acquisitions in Limassol stood at 71% and in
Famagusta, Paphos and Nicosia stood at 65%, 65% and 47% respectively.
No. of properties acquired by foreigners based on sale
contracts
No. filedacquired
of properties at the DLS (2018 - based
by foreigners H1 2020)
on sale
contracts filed at the DLS (2018 - H1 2020)
5.000 +3%
4.481
4.367
4.500 700
1.999 623
2.180
4.000
600
3.500 H2 2018 H2 2019
500
3.000 429
386
2.500 400 357 368
325 337
2.482 (44%) 319
(44%)
2.000 2.187 300
212 197
1.500 196
200
1.391
1.000 124
H1 2018 H1 2019
100
500 H1 2020
- -
2018 2019 2020 January February March April May June
Source: Department of Lands and Surveys (DLS), PwC Analysis 2019 2020
28 PwC CyprusThe highest concentration of sale contracts Geographic distribution of properties acquired by
filed by foreign buyers was in Paphos (38%), foreigners based on sale contracts filed (H1 2020)
followed by Limassol (27%). The two coastal
districts together make up two thirds of foreign
transactions on the island.
All Cyprus districts recorded a year on year 7% 10%
decrease, between 25% - 50%, in terms of
number of properties acquired by foreigners
(based on sale contracts filed at the DLS).
Nicos
Nicosia Famagusta
Theia
18%
image part with relationship ID rId8 was not found in the file.
Although Nicosia only made up 7% of 38%
properties acquired by foreigners during
Larnaca
H1 2020, the capital recorded a 48% drop
27%
compared to H1 2019. Limassol and Paphos Paphos
follow behind with a 47% decrease each.
Limassol
Source: Department of Lands and Surveys (DLS), PwC Analysis
YoY
YoY %% change
change in of
in no. no. of properties
properties acquired
acquired by foreigners
by foreigners per per
district
district based
based on sale
on sale contracts
contracts filed
filed (H1 (H1
2020 Vs2020 Vs H1 2019)
H1 2019)
%
growth (48%) (47%) (35%) (26%) (47%)
No. of properties acquired by foreigners
1.200
1.014
1.000
800 719
600 533
378 391
400 255
181 177
200 94 131
-
Nicosia Limassol Larnaca Famagusta Paphos
H1 2019 H1 2020
Source: Department of Lands and Surveys (DLS), PwC Analysis
Cyprus Real Estate Market 298
High-end residential
property segment (≥€1,5mln)
The segment of high-end residential properties was perhaps the most badly hit segment during the first half of 2020.
Based on PwC analysis, during the first half of the year, transactions of high-end residential properties reached 51 in total,
plummeting by 78% compared to H1 2019 (234 sales of residential properties recorded in H1 2019).
Given that the high-end residential property segment is almost directly linked to CIP buyers, the suspension of the
programme creates uncertainty with regards to the future of this segment and intensifies the need to re-focus and transform
developments which were intended for this segment of the market.
Volume of high-end residential properties sold (≥ €1,5mln)
Volume of high-end residential properties sold (≥ €1,5mln) 324 319
317
350
No. of properties transacted
300 215
250
102 87
125
200
106
150 72 67
51
100 27 175 191
42 157
50 122
18 21
37 55
- 19 25
2013 2014 2015 2016 2017 2018 2019 H1 2020
Limassol Paphos Famagusta Larnaca Nicosia
Source: Department of Lands and Surveys (DLS), PwC Analysis
Note: High-end residential property segment statistics for all years were based on a data extraction dated 02/10/2020. Any differences
with previous publications relate to amended Land Registry records (e.g. cancellations of previous sales etc.) and discrepancies between
the date of agreement and respective filing date.
30 PwC Cyprusf high-end residential properties sold (≥ €1,5mln)
Transaction value of high-end residential properties sold (≥ €1,5mln)
Transaction value of high-end residential properties sold (≥ €1,5mln)
14 18
€810
€800 20
10%
20 23mln
900 mln €740
mln
800
€570 4% 877%
700 102 7% 6% 125 of total transaction
mln 7%
17 value of the sector
600 25%
30%
7% 40%
500 67
€mln
€280 28%
400 mln
€190
300 mln 191 €117
€80 175 61%
200 42 35% 57% 157 mln
mln
11 122 61% 49%
100 18 28%
56% 40% 20
77% 51%55 53%
- 37 24
19
2013 2014 2015 2016 2017 2018 2019 H1 2020
2013 2014 2015 2016 2017 2018 2019 H1 2020
Limassol LimassolPaphos
Paphos Famagusta
Famagusta Larnaca
Larnaca Nicosia Nicosia
Source: Department of Lands and Surveys (DLS), PwC Analysis
Note: High-end residential property segment statistics for all years were based on a data extraction dated 02/10/2020. Any differences with previous publications relate to
amended Land Registry records (e.g. cancellations of previous sales etc.) and discrepancies between the date of agreement and respective filing date.
Transaction value of high-end residential properties sold
Transaction
(≥ €1,5mln)value of high-end
(H1 2019 residential properties sold (≥ €1,5mln)
Vs H1 2020)
In terms of sales value during H1 2020, the
high-end residential property sector (≥ €1,5mln)
(H1 2019 Vs H1 2020)
totaled €117mln, a 78% drop compared to H1
2019.
€530
mln (78%) (78%)
250
200 234 Decline in € Decline in #
The high-end residential property segment
150 €117
accounted for merely 10% of the total value of
100 mln
real estate transactions in Cyprus during H1
2020, (compared to 20% during H1 2019). 50
51
-
H1 2019 H1 2020
Cyprus Real Estate Market 31Looking at the volume and value of high-end residential property transactions on a monthly basis during
H1 2020, it appears that in total, after the implementation of the lockdown measures in mid-March 2020,
only 17 housing units were sold (during the 3 month period), with a total value of €44mln.
Volume and value of high-end residential properties sold (≥ €1,5mln) (January - June 2020)
Volume and value of high-end residential properties sold (≥ €1,5mln) (January - June 2020)
Value €24
(€mln) mln €24 €25
14
mln mln
12
12 11 11
€15
10 €18 mln
mln
8 €11 7
mln 6
6
4
4
2
-
January February March April May June
No. of units sold
Source: Department of Lands and Surveys (DLS), PwC Analysis
32 PwC CyprusHigh-end residential property transactions per district by
Limassol district continues to hold the highest number
share in terms of number of high-end property 0%
transactions (49%), followed by Paphos with 6%3%
2% 10% 8%
2% 2%
41% of the share.
49%
2019 51% Η1
48% 2020
38%
40% 41%
Limassol Paphos Famagusta Limassol Paphos Famagusta
Limassol Paphos Famagusta
Larnaca Nicosia Larnaca Nicosia
Larnaca Nicosia
Source: Department of Lands and Surveys (DLS), PwC Analysis
* The PwC Analysis has been based on transaction data by the DLS in a digital format, extracted from
the DLS Portal on 02/10/2020 and relate to transactions with an agreement date of up to 30/6/2020.
High-end residential property transactions per property type
During H1 2020, houses appeared to be the by number
preferred residential property type reaching
63% of total high-end residential transactions
across Cyprus, compared to 53% in 2019.
37% 37%
2019 47%
53% Η1 2020
63% 63%
Apartments Houses Apartments Houses
Apartments Houses
Source: Department of Lands and Surveys (DLS), PwC Analysis
* The PwC Analysis has been based on transaction data by the DLS in a digital format, extracted from
the DLS Portal on 02/10/2020 and relate to transactions with an agreement date up to 30/06/2020.
Cyprus Real Estate Market 33High-end residential property segment (≥€1,5mln)
Transaction Volume by Price Band
Most of the transactions in the high-end residential segment Transactions in all price bands demonstrated significant
during H1 2020 were in the €2mln – €3mln price band decreases during H1 2020, compared to H1 2019. Notably,
(representing 55% of the total volume of high-end residential during the first half of 2020 only 1 sale of a single residential
property transactions). unit exceeding €5mln was filed at the DLS.
Transaction
Transaction volumevolume by band
by price price band No. of Transactions
2015 4
2016 10
2017 11
>>55 2018 12
2019 11
Η1 2020 1
2015 19
2016 30
2017 48
3-5 2018 36
3-5 2019 25
Η1 2020 5
2015 59
2016 125
2-3 2017 204
2018 196
2 -3 2019 196
Η1 2020 28
2015 24
2016 50
1.5 - 2 2017 54
2018 80
2019 87
1.5 - 2 Η1 2020 17
2015 2016 2017 2018 2019 H1 2020
Transaction volume by price band (H12015
2019 Vs H1 2020)
2016 2017 2018 2019 H1 2020
Transaction volume by price band (H1 2019 Vs H1 2020)
>5 7 H1 2019 7
(86%)
1 Η1 2020 1
14 H1 2019 14
3-5
5 Η1 2020 5 (64%)
2 -3 151 H1 2019 151
(81%)
28 Η1 2020 28
1.5 - 62 H1 2019 62
2 17 Η1 2020 17 (73%)
H1 2019 H1 2020
Source: Department of Lands and Surveys (DLS), PwC Analysis
34 PwC Cyprus9
Construction Activity
The total number of building permits issued during the first half of 2020 reached 3.153 compared to 3.393 during the first
half of 2019, representing a drop of 7% YoY. In terms of value, building permits demonstrated a more significant reduction at
35% during the same period.
It is noted that construction activity was significantly hit at the beginning of the pandemic outbreak following lockdown
measures. To a large extent, the drop observed may be attributed to the lockdown measures during a big part of the period
under review, which inevitably affected the procedures of the private and public sector required to issue permits.
Building
Building Permits
Permits Number
Number Vs Value
Vs Value (m2 / €mln)
(m2 / €mln)
10.000 4.000
8.777 3.729
9.000 3.500
8.000 7.506 7.172 7.218
3.000
7.000 6.408
No. of permits
2.640 5.728 2.500
6.000 5.341 5.354
4.933 5.014
€ (mln)
5.000 2.065 2.055 2.000
4.000 1.632 1.720 3.153 1.500
3.000 1.141 1.158
1.071 1.000
2.000 859
1.111
1.000 500
- -
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 H1 2020
Source: Cystat, PwC Analysis Number of permits Value of permits (€mln)
Building
Building Permits
Permits NumberNumber Vs(H1
Vs Value Value
2019(H1 2019
Vs H1 Vs H1 2020)
2020)
4.000 1.703 1.800 (7%)
3.500 1.600
Decrease in #
No. of permits
3.393 1.400
3.000
3.153
€ (mln)
1.200
(35%)
2.500
1.111 1.000
2.000
800
1.500 600
Decrease in €
1.000 400
H1 2019 H1 2020
Source: Cystat, PwC Analysis
Number of permits Value of permits (€mln)
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