During the period 2004 to 2009, the Cypriot real estate market expanded considerably as a result of the substantial bank financing provided to real estate developers, as well as to individuals for the purchase of land and other types of real estate property and also due to the strong demand by holiday-home buyers.

Following the European economic downturn, there was a sharp drop in the demand for properties by foreign buyers, leading to a severe decline in the real estate sector in 2010. The Cypriot financial crisis reached its peak in 2013 with the over-expansion of the banking sector and the deterioration of the general economic activity and public finances. This led to Cyprus entering the economic adjustment programme, which covered the period 2013 – 2016. The economic adjustment programme addressed short- and medium-term financial, fiscal and structural challenges faced by Cyprus. The key objectives were to:

Years 2014 and 2015 showed signs of improved transaction activity. Cyprus exited its economic adjustment programme in March 2016, much earlier than initially projected, with considerable success in terms of fiscal reform and financial sector restructuring.

Improved investors’ confidence in the Cyprus economy and the property market led to a further significant increase in transaction volume within 2016 and 2017. The increase in property transactions was mainly driven by the introduction of property tax incentives and the government’s citizenship programme, named “Scheme for Naturalization of Investors in Cyprus by exception”, but also included transactions recorded by local banks in the context of implementing Debt-for-Asset swaps for the restructuring of their Non-Performing Exposures.

The Limassol real estate market performs consistently well over the past couple of years and is undoubtedly the preferred location for investors looking to buy high-end properties through the citizenship programme. Therefore, the real estate market is currently experiencing a strong surge, with increased demand for luxurious residential and commercial property, the majority of which are within the €2 million to 3 million band. Limassol actively responded to the increased demand for this type of properties with an increasing number of high-end residential projects currently being planned.

In addition, the planned luxurious integrated casino resort in the west part of Limassol, is expected to further benefit the Limassol economy and property market by increasing tourism, creating new jobs, generating additional tax revenue, and attracting foreign investment.