According to the recently published financial report of theCentral Bank of Cyprus, more stringent criteria introduced earlier during theyear to obtain a Cypriot passport have affected the sale of real estate.
Due to the sharp increase in demand for real estate in thefirst months of 2019, a slight decrease was recorded after the recentstrengthening of the criteria for the Citizenship by Investment program on theisland. Sales increased 13.7% year on year for the period January-October 2019.Over the same period, the number of real estate sales to local buyers andforeign buyers also increased by 22% and 4.7%, respectively, which indicatesthat the demand for real estate comes from both local residents and foreigners.
However, the report of the Central Bank of Cyprus notes thatif this period was divided into the period before the implementation of morestringent program criteria (January-May 2019) and after implementation(June-October 2019), then demand grew by 48% and decreased by 5 , 1%respectively among local residents; among foreigners: an increase of 20.2% anda decrease of 8.5%, respectively.
At the same time, housing prices are showing moderategrowth, with the exception of the coast of Limassol and Larnaca. There isconcern that a recorded price increase in these two areas may extend to others.“Areas with high price increases need careful monitoring, as well as monitoringpotential secondary effects to other areas,” the report said.
Meanwhile, the European Systemic Risk Board (ESRB) assessedthe residential real estate sector in Cyprus at the recovery stage, alsoassessing that the likelihood of risks was limited. According to the lateststatistics, the report shows that in the first half of 2019, investments inhomes reached 760 million euros (7.1% of GDP), and investments in otherbuildings and structures amounted to 473 million euros (4.4% of GDP).