Cyprus sales up 25pct on foreign buyers; few locals buying home

Cyprus homes sale up 25pct on foreign buyers; few Cypriots buying home

Property sales in Cyprus shot up by 25 percent in February, with demand from foreign buyers driving new business across the island state.

The number of contracts on property sales rose to 834 from 666 in the same month a year earlier, according to data released on Monday.

The largest increase was in Nicosia, which showed a 47 percent in real estate contracts, followed by Paphos (22 percent).

For the first two months of the year, the increase in sales reached 18 percent from levels seen in 2018.

Rising rents in Cyprus are supporting the spike in demand for property as a higher number of tourists and university students boost accomodation needs in the country. But the key driver behind growing demand for real estate is the country's citizenship for investment program.

This is driving the recovery in the housing market, adding to the traditional foreign demand for second homes among those who visit the Mediterranean country.

The Golden visa program also contributed to the regional differences in price trends seen across the country, according to the European Commission.

In a report published last week, Brussels said that real estate prices in Limassol, where the foreign, predominantly Russian, community is concentrated, rose much more strongly than elsewhere.

"Meanwhile, house purchases by Cypriots continue to be restricted by limited bank lending. Therefore, despite the improving economic situation for Cypriot households, locals bought fewer properties than in the previous year," adds the report.

The supply of real estate and shift to the luxury segment is also accommodating the higher demand as construction continues to rise in a trend that started in mid-2016.

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