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Increasing Sales and New Incentives

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03-07-2016

Increasing Sales and New Incentives

As corrections to the overheated Cyprus property market continue, the numbers of completed sales are on the rise. Transaction volume rose by around 9% in the first eleven months of 2015, compared to the same period in 2014, with October 2015 seeing a 23% rise in property sales. Although a positive development, the volume was significantly lower than the peak recorded before the recession. Limassol had the highest number of transactions, accounting for 31% of the total volume, while Famagusta accounted for just 6% of the total. During the first ten months of 2015 the number of building permits authorised for both residential and non-residential projects fell by 0.5% compared to 2014, but their value saw an increase of 18.3% to €846 million and their area increased by 14.2%.

New legislation has been enacted providing additional benefits to investors in the property market, such as an exemption on transfer fees and capital gains tax on properties purchased by 31st December 2016. Perhaps not surprisingly, local financiers remain cautious, but foreign investors are showing increasing interest in the Cypriot real estate sector. Around 20% of sales are driven by foreign buyers, proving Cyprus continues to be on the list for investors, holiday-home seekers, expats and retirees, with the traditionally popular areas of Paphos and Limassol leading the way. It is expected that transactions in the property market will remain concentrated on prime assets while overseas buyers, encouraged by the government’s Naturalisation Scheme, will focus almost exclusively on high-end residential properties according to a report published by Resolute Asset Management, while institutional investors are focused on producing income from their investments, such as grade A properties and sizeable plots of land with tourism development potential.
 

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