Updated post for 2024. All the information about real estate investments in Cyprus.
Roman (my husband) and I moved to the city of Limassol, in Cyprus, in May 2021 (if you are interested in the topic of moving here, I wrote a detailed post about relocation to Cyprus). We moved during the COVID-19 period and Roman recognized that there is potential here in real estate investments.
Why? The prices were low because of the coronavirus, Cyprus really started to develop (we had been to Cyprus several times in the last seven years and on each occasion we had seen more constructions and more new places), they announced that they were going to open a resort with the biggest casino in Europe, they started building a port for cruises in Limassol, and in general because of the low taxes. A lot of friends started moving here, as well. In addition, the war between Russia and Ukraine started, which caused many Russians and Ukrainians to move here. Of course, all these things also caused an increase in prices, but it further proved to us the potential that exists in real estate in Cyprus.
About the real estate investments we made here in the city of Limassol
From the moment we moved in, we started looking for good properties to invest in and went to see a lot of apartments.
One day a really good investment opportunity popped up from someone who wanted to sell her apartment quickly. The apartment needed a complete renovation to make it livable and she did not have the financial ability for that.
We purchased the apartment and brought a couple of friends who are local architects to accompany us in the renovation process. They made sure to bring a contractor and his workers with them. The renovation took about three months and at the end we got a centrally-located, two bedroom apartment that looks like new. Although the building is old, it has also been renovated in the lobby and strengthened against earthquakes.
The price we paid was very low for the market and today there are no such prices (it came out to cost us 195 thousand euros including everything – including furniture). We rent the apartment for 1600 euros.
We were very enthusiastic about the subject of apartment renovation and continued to look for properties for additional investments. After a year or so Roman, found a second-hand apartment with three bedrooms again in a central location, at a low price for the market, and in need of a complete renovation. We decided to renovate it to a really high standard because we decided to move in. We hired the couple of architects and the contractor again and after five months of renovation we moved into the apartment. We bought this apartment with a mortgage from a bank in Cyprus.
We recently purchased an area with an investor in order to build a building there. We are now in the drawing process with the architects to get initial approval for the construction of the building (a process of about six months).
As you can probably see, we really believe in the real estate market in Cyprus. Although the prices are much, much higher than they were when we moved here, the apartment prices still haven’t risen to the same level as the rental prices, and this makes it possible to purchase an apartment at a relatively low price and get a return of at least 5%, and even in really good opportunities, you can reach 8%.
Since we moved here, I’ve documented our investments on Instagram and saw that a lot of people were interested in the subject. So I decided to write you a complete guide with all the information about real estate investments in Cyprus. I contacted Itay Erez, owner of the Winest Group, a company specializing in real estate in Cyprus and relocation processes, and together we wrote this post so that you can receive as much information as possible regarding investments in Cyprus.
So, how did it all start and what does it even mean to invest in Cyprus?
Even before the legal reform and much thanks to the coronavirus, many families wanted peace of mind and decided to relocate to more comfortable places such as Thailand, Costa Rica and Cyprus. Without a shadow of a doubt, the families simply jump into the water and try their luck. For many years the local economy has benefited from funds from foreign investors, starting with the Chinese who wanted to get European citizenship and invested money to buy properties.
This continued with the Russians and Ukrainians who came following the great escape from the war. And let’s not forget the presence of the British, who once ruled here and Cyprus was their retirement home. There’s also the Christian Lebanese who ran away from everything that is happening with Hezbollah, and of course the Israelis, who are trying to escape from the country but are still trying to stay very close. And of course there are also Poles, Germans and other foreign investors.
So, what happened? The Cypriots announced the establishment of high-tech and financial companies in the city of Limassol, following the tax benefits for companies. They renovated the marina so that the largest cruise company in the world would arrive all summer, built the largest casino in the Middle East, and announced the construction of the new marina in Larnaca. And all this is without talking about the tourism that was already in Cyprus anyway. In 2019 there were almost 4 million tourists and there were 3.8 million tourists in 2023.
When the Israelis were looking for investments in countries around the world, the real estate market in Cyprus rose every year by dozens of percent and only in the last two years has the wave of Israelis reached the country.
When looking at real estate in Cyprus, we will probably focus on three main cities: Limassol, Larnaca and Paphos, however, there are also Ayia Napa, Protaras, Nicosia and of course the Troodos Mountains. Each of the cities has its own uniqueness that can suit the character of each investor according to their personal preferences and.
In which city should you invest in Cyprus?
Limassol
The most developed city in Cyprus that is not based only on tourism, but is also known as a place of employment for high-tech and where the “big money” is found. When you arrive in Limassol, you cannot miss the magnificent towers they built, ones that cannot be found anywhere else in Cyprus. The old town in Limassol attracts locals and tourists alike – there we can find the avenue of shops, bars and places of entertainment.
In the real estate aspect, it seems that prices on the eastern side of the city have risen significantly and it is very difficult to find properties at cheap prices, therefore there is a very large demand on the western side of the city, in the Zakaki area. It is important to note that the Zakaki area is not developed and looks like the ‘Zone’ regional council, between Holon and Tel Aviv, where we can see factories, trucks and more. Real estate prices in the city have risen significantly – we can find apartments (in general) with two bedrooms and a living room, as cheap as €220,000. Of course, there is always a bargain and you might be able to find an apartment even for 200,000 euros. In the eyes of many, Limassol has made a significant leap and there is a fear that it has reached its peak, but the real estate majors compare Limassol to Tel Aviv in Israel and predict that the increases will continue in the coming years. As long as the island is under development, the market value of Limassol will continue to rise.
Larnaca
The international airport of Cyprus is in Larnaca, which causes millions of people to pass through the city. It is located between Limassol and Ayia Napa, and at a very short distance from Nicosia, the capital city. Larnaca is a port city that is known its tourism during the warm periods of the year, however there are also travelers who come in the winter. In the last two years, the real estate industry in Larnaca has jumped by tens of percent following the changes that are being made in the city, such as the new shopping mall and the announcement of the construction of the new marina in the city. The village in Larnaca that is best known among Israelis is Livadia, which is very close to the new marina and many believe in the potential and increase in value there. We can find properties in Livadia with two bedrooms and a living room in a new complex with a pool and a gym for only 250k euro. We can also find a two-bedroom apartment and a living room for 700 euro. In my opinion, Larnaca is a destination with excellent potential, because the city is at the beginning of its development and the loans are more accessible. The biggest anticipation I have is to see what will happen to the city and the whole island when it seems that the construction of the marina is really progressing.
Paphos
An amazing city that is very suitable for people who love nature. We can see the sea from the window of almost every village in the Paphos district and it is known as an excellent summer town. We can find a complex with a pool or all-inclusive hotels at attractive prices. Recently, there has been a positive immigration to Paphos, causing an increase in population, which has resulted in Paphos not being just a summer town, but a city that operates all year round.
Unlike Larnaca and Limassol, in Paphos we can see greenery almost everywhere, however there has been a very large development in the last two years and we can notice buildings that are under construction almost everywhere.
As of today, the prices in Paphos are a little more expensive than those in Larnaca – we can find a complex with a pool and a gym in reputed areas such as Universal, Kato Paphos and the Tombs of the Kings for a little over a million shekels. In the eyes of veteran investors, Paphos still has a lot to expand to, but this will cause the green areas to become construction sites in the coming years.
In each of the cities we can find an excellent price, a good yield and of course very favorable taxation.
When talking about the yield, it is important to note that the real yield today in Cyprus is about 5-7%. Yes, there is still a “reality” of 8%+ but nevertheless the prices are rising.
Until now we have talked about the real estate route in Cyprus in its three main cities, and now we will touch on taxation – one of the biggest advantages of the country.
Recommended neighborhoods for investment in the city of Limassol
In general, the central and tourist areas are under the highway. But there can still be good investments above the main road if there is quick access to it.
Mesa Geitonia area, a central area in Limassol – there are many corporate offices here, the main avenue of Makrios passes through here, and it is a sought-after area for rent.
The touristic areas that are close to the sea – especially the touristic neighborhoods of Germasogeia, Agios Tychonas, Mouttagiaka, Limassol, Neapolis.
The zoo area and the urban garden
The marina area – a very prestigious area
The Old City – mainly good for short-term rental apartments
Zakaki area – we personally connect less with this area because it is far from the center but on the other hand it is a very developing area because it is close to the resort and has the largest casino in Europe – which opened the previous summer. Because the rents in the city center are too high, many companies prefer to set up their offices there. It is an area that is considered more of a zone to buy new apartments as well and in the long run it may or may not pay off.
Of course, every neighborhood has exceptions. There are certain buildings or areas in neighborhoods where immigrants/refugees live. In this case, most of the buildings will be outdated and not maintained: an elevator does not work, a smelly stairwell, etc. They usually have several roommates living in one apartment, so it is necessary to check each case individually.
Limassol is considered the most expensive city in Cyprus, so an investment in a two-bedroom apartment will be at least 220,000 euros.
On the other hand, there is also the strongest population here, so you can rent apartments at high prices and get a good return.
Recommended neighborhoods for investment in the city of Larnaca
Phenicodes
Mackenzie Mackenzie
Lividia
And even at about a 10-minute walk towards the city from Pinikouds towards the American Academy.
Recommended neighborhoods for investment in the city of Paphos
Kato Kato
Tombs of the Kings
Universal
And recently there is a great revival in Geroskipou as well.
Of course there is Peyia, mainly for private homes.
What are the disadvantages of investing in Cyprus?
Cyprus is a developing country and you have to get used to that. We are not coming to a European country like Madrid, Athens or Brussels.
“Siga Siga” – everything works slowly and what can be postponed until tomorrow, is postponed for another two days. The pace in Cyprus works differently and this is why many people love it – there are no great mental pressures…
Reduction of options – as everywhere, there is a window of opportunity where you can invest and earn money, but the window in Cyprus is getting smaller every day.
Bank guarantee – since the crisis in 2013, contractors prefer not to take loans from the bank and therefore there are no bank guarantees. So, what are we doing? The lawyer deposits the contract in the land registry as a warning note in the register in your name and you pay in installments. The lawyer performs all the comprehensive checks to make sure that the contractor is stable.
Contractors – there are contractors who advertise themselves in all kinds of different channels, but it is important to get to know the contractor in depth and not just from the angle of the broker or investor lender. It is important to hear about past cases and make sure that the contractor will deliver the property on time, in good quality, and with a clear wording.
Relocation through the purchase of a property in Cyprus
Buying a property for 300,000 euros + VAT allows you to obtain PR (permanent residency) in Cyprus.
The conditions for obtaining a PR when purchasing a property in Cyprus
- Purchase of a new property over 300 thousand euros
- VAT must be paid
- Proof of income
- It is not possible to work in Cyprus
- Proof of clean criminal record
- Must come to Cyprus at least once every two years.
Why should I apply for Permanent Residence?
You get a residence permit in Cyprus – you can stay more than 90 days in Cyprus and you don’t have to resubmit the application every year.
You can use the state health services of Cyprus – GESY
You can apply for citizenship after five consecutive years – as of today*
The process of purchasing a property in Cyprus – accompanied by Winest Group
- Introductory call
- Information about the areas
- Understanding the laws of Cyprus – there is no bank guarantee
- Potential asset sharing
- A tour of Cyprus to get to know the cities and villages, and see properties
- Meeting with professionals
Once we have found a property:
- Memorandum of understanding
- Signing the contract
- Payment according to the rate of construction progress
- Receiving a key
- Taboo wording
The advantages of buying a property in Cyprus
- Proximity to the sea
- Excellent yield
- Development all over Cyprus
- Encouraging foreign investors following taxation
- High-tech development
- Permanent residency status
- Full registration in Tabu
- Quality of life
The forecast for the next five years in the real estate market in Cyprus
I was at a real estate fair on July 3-4, 2024 in Limassol called the REALTY on EXPO.
During the fair there were several lectures and I went to a question panel in which five participants from the real estate sector would participate who talked about the forecast for the next five years in said market in Cyprus. I briefly summarized what was said.
Will uncertainties like the state of the war with Israel affect the market negatively here in Cyprus?
According to history, you can actually see that these situations have caused the market to develop here.
As happened in the war of Lebanon, as happened in the war of Russia-Ukraine
At first there is shock for a month or two, but then people recalculate their route and realize that they need a plan B for living and Cyprus is a very inviting and accepting island so they find refuge here.
Can something have a negative effect on the real estate market in the next five years?
I see no reason for anything to change in the coming years and I think the market will continue to develop as it is now. You have to be focused and keep doing what you are doing now. The demand is increasing and the PR program is also increasing the demand. Every year there are 4000 new apartments for sale on the island, so yes, we meet the demand.
Is there a decrease this year compared to last year?
There are those who say that there has been a decrease this year in the demand for apartment purchases, but this is not true, it is a good and normal year. Last year was crazy and unrealistic. Entrepreneurs have not kept up with the demand. It is actually encouraging that this year was a normal year and it is going to be like this for the next five years. There will continue to be a normal, steady increase every year.
What about the local market?
We are constantly looking at the foreign market, but the most sales (not investment amounts) were made by the locals, so we should not neglect the local market.
Which cities are the most worth investing in?
According to the opinion of one of the presenters on the panel, Limassol and Ranka have the most potential in the further development of real estate here. Paphos is a bit different because it attracts more retired people.
What is important to do for the continued development of real estate here?
What is most important is to continue to develop and maintain economic stability and not do this only in terms of real estate, because eventually the wars will end and what is important is to have solidity here. The education will advance very much to an international level. The university here in Nicosia is very advanced.
In order to continue growing in real estate, there must be a strategy and smart planning on the part of the real estate entrepreneurship here. There is very rapid growth here, but this causes a lack of time to invest in planning and strategy. The coronavirus was difficult but, on the other hand, it gave entrepreneurs time to stop and plan ahead, building a smart plan. Now there is accelerated growth and this can create a disadvantage in the lack of time for a correct strategy. Better infrastructures are needed and they are working on it, but we need to think about the future, and not just for the next five years, but beyond that.
What are the main challenges that developers have to face?
The changes in the construction laws on behalf of the government
The biggest bottleneck right now is the number of people in construction
There are not enough people and this causes postponements and prevents entrepreneurs from starting more projects
We are in the process of approving bringing in more foreigners for construction; if things don’t change, it will continue to be a bottleneck and we won’t be able to grow in construction.
WhatsApp group for real estate investments and relocation in Cyprus
I opened a WhatsApp group for real estate investments in Cyprus, and me and Erez will manage the group. There are short contents related to the real estate sector and relocation to Cyprus, interesting projects for investment, second-hand apartments that Roman and I are going to see at low market prices, webinars on the topic of real estate and relocation that will be done later, and more… If this is an area that interests you, you are welcome to join the group and share it with friends.
Link to WhatsApp group for real estate investments and relocation in Cyprus
In conclusion, Cyprus offers many investment opportunities and, through tax benefits and great prices, it encourages foreigners to invest in the country. Real estate prices in Cyprus have climbed in recent years and continue to climb thanks to the great demand. There are many proposals for investments throughout Cyprus, but it is important to understand what the property’s potential is and not just what the property’s price is, so what will you do with a property that costs 100,000 euros and you cannot rent it? In my opinion, location is the name of the game and it’s worth investing a little more and knowing that we can rent out the property. As well as believing in the potential for an increase in value, the island is under a lot of development. The process for buying a property in Cyprus can be very confusing, with all the different advertisements on the networks, but the process can also be very simple when you choose the right people around you.
If you are interested in investing in real estate in Cyprus and are looking for a company that will accompany you throughout the process, you are welcome to leave your details in the form and Winest Group will get back to you (free consultation).
More posts I wrote on that
Relocation to Cyprus – why did we choose to move to Cyprus?
My recommendations for car rentals in Cyprus
Great day trips in Cyprus
In which hotels we stayed at while in Cyprus
Cyprus: Itinerary in Cyprus – Recommendations for accommodation, restaurants and attractions
What to do in Cyprus in winter
Cyprus with kids
Recommended restaurants in Limassol