Property sales in Cyprus exceeded all estimates in 2014, recording the first year-on-year increase in transactions since 2010.
According to statistics published by the Department of Lands and Surveys, property transactions in 2014 grew by 20% to reach 4,527 compared with 3,767 the previous year.
Cyprus has recovered beyond international expectations as a result of the steady progress made in restructuring its economy, with a projected return to growth in 2015.
So far, Cyprus has passed all evaluations with flying colours and the country – one of the smallest EU member states – is estimated to come out of recession in 2015. After a three-year exclusion, the country’s return to international markets sooner than expected has been a significant confidence booster.
Of the 4,527 property transactions in 2014, 74% were bought by Cypriots with the remaining 26% being purchased by overseas buyers.
Cyprus has an open, free-market, service-based economy with a long record of successful economic performance. The country’s strong business environment, highly educated workforce and favourable tax regime are set to continue attracting investment in its property market.
The tourist hotspot Famagusta recorded the largest increase in the number of registered sales, from 241 in 2013 to 330 in 2014, an increase of 37%, followed by Limassol (35%) and Larnaca (31%). Nicosia and Paphos both recorded a much more modest increase of just 6% although transactions are expected to pick-up substantially in these regions during 2015.
The Cypriot tourism sector was harshly affected by the financial crisis and the country’s proximity to Syria has hampered growth in both tourist and real estate markets to some degree. Visitor numbers still increased marginally in 2014 by 1.4%. Tourists from the UK decreased by 5.1%, Russia by 25.2% and there were 10.4% fewer visitors from Greece whereas there was a surge in visitors from Germany, recording a 24.5% increase during the year.
Tourism is expected to strengthen into 2015 and with property prices at extremely low levels, there are plenty of opportunities for investors to snap up high-yielding bargain properties on this beautiful Mediterranean island.
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Property sales rose by 19.79% year-on-year to 454 in December, an outcome which was expected, given last year’s low base, said Alpha Bank Cyprus Treasury’s Alexis Kitromelides and Stavros Hadjichristofi, in their weekly report.
The rise last month compared to 379 property a year earlier and 370 in November 2014 for a 22.7% monthly gain.
“Property sales have considerably increased in 2014 although the percentage rate of ascent has slowed down in the past months since it peaked at +50.94% y-o-y and +157.48% y-o-y in June 2014 and May 2014, respectively,” the Alpha Bank Cyprus analysts said.
In 2014, sales totalled 4,527 (+20.18% y-o-y), compared to 3,767 in 2013, driven by a rise in all districts. Transactions in the offshore company haven city of Limassol jumped by 35% y-o-y to 1,417 (from 1,049), whereas sales in Famagusta district increased by 37% y-o-y to 330 (from 241). During the same period, a rise was observed in Nicosia (+6% y-o-y to 748), Larnaca (+31% y-o-y to 794) and Paphos (+6% y-o-y to 1,238).
“The leap in sales can be attributed to several reasons,” the analysts said, and explained:
“Firstly, due to the 2013 low base that was shaped by the March Eurogroup decisions and the following liquidity squeeze. Secondly, due to increased foreign demand, a trend that has been building up since the government introduced the visa-for-property purchase scheme. Lastly (according to sector agents), 2014 transactions were boosted by housing loan settlements by banks, since there is clearly a positive correlation between rising non-performing loans and sales volume.”
According to the Department of Lands and Surveys, the number of properties sold to foreign buyers amounted in the previous year to 443.
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Provinces most preferred by foreign buyers for their investments are ranked as Antalya, Istanbul and Aydin respectively, with an average of 1500 monthly transactions between January and November.
The easing of the law which governs property purchases by foreign nationals in 2012, opened up Turkey’s booming real estate market to investors from Russia, the Arab world, and Southeast Asia. The country also grants residency permits to foreigners who acquire property.
Real estate purchases by foreigners in Turkey reached a volume of USD 3 billion in 2013. Recent data from the Central Bank of Turkey reveal that foreign direct investments in the form of property purchases have already hit USD 3.5 billion for this year in the first 10 months.more >>> Comments Off
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Istanbul property consultants Universal21.com report a busy month of sales in December with investors taking advantage of a slump in the value of the Turkish Lira against other major currencies.
Universal21 highlight recent news from Turkish property developer, Dumankaya which suggested that sales of property to foreign investors had increased by 31% in December.
The recent slump in the value of the Lira against the US Dollar and GBP has meant that the spending power of foreign investors will have increased and this encouraged many to invest before the central bank interest rate hike which took place last week.
The Turkish Lira has since recovered slightly, however there is still some way to go before the Lira makes up the ground it lost towards the end of 2013 and early 2014 according to Universal21 analysts.
Adil Yaman, Director of Universal21 comments, “The recent increase in interest rates will almost inevitably have a cooling effect on property prices in the short term. Istanbul property prices have continued to rise but at a slightly slower pace than we have been used to in the past three years.
The driving force for the double-digit growth we have seen has been foreign investment and low mortgage interest rates. As mortgage loan rates start to move in the opposite direction finance to buy homes will become less accessible and we would expect a shift towards renting.
This is good news for foreign investors who can invest now while their currencies are strong and take advantage of higher rental yields. Longer term it is in Turkey’s interests to bring down rates to keep economic growth on track.”
Property prices in Istanbul increased by up to 13.62% in 2013 and overall the price of new homes in the city have increased by nearly 50% in the four years since January 2010.
Turkey’s currency slump is seen as part of wider emerging market problem as the United States begins to ease back on quantitative easing and investor money returns to take advantage of a strengthening US Dollar.
Source Property Secretsmore >>> Comments Off
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