Cyprus property sales fell sharply last year according to the Deloitte Cyprus Real Estate Market Report released on Tuesday.

The total contracts of sales for Cypriot properties dropped 23 per cent to 7,968 throughout 2020, down from 10,366 in the previous year. March, April and May were particularly slow months, with pandemic-rooted restrictions and closures meaning April saw just 216 sales, compared with a monthly average of 664 throughout the year.

Unsurprisingly, Limassol saw the bulk of the action, recording 33.9 per cent of overall sales. That is compared with 25.4 per cent in Paphos and just 19.3 per cent in Nicosia. However, being coastal cities and benefitting from disproportionate levels of foreign investment, Limassol and Paphos will likely suffer the most from the negative effects of the unexpected cancellation of the CIP program last November.

Foreign buyers were behind just over 40 per cent of all property sales recorded in 2020, down from a high of 47 per cent in 2018. This figure is expected to decline further with Brexit affecting the ease with which British buyers can acquire property as well as the aforementioned cancellation of the CIP.

Since the start of 2020, rental prices per square meter have dropped across the whole island with the exception of Limassol, where they have actually climbed seen steep climb. All other regions experienced a downturn in the region of 20 per cent, pushing rates below levels last seen in 2017.

Despite declining rents, overall yields were not too badly affected, as a slight decline in housing prices through 2020 evened things out for investors. Retail spaces remain the strongest investment, bringing in just under 6 per cent on average per year, narrowly beating out office spaces for the top spot. Houses on the other hand average just over 2 per cent, while landlords can expect in the region of 4 per cent for an apartment.

Finally, the study surveyed the sentiment amongst key stakeholders in the property market including valuers, contractors, real estate agents and property developers from all over Cyprus. In the short term, 69 per cent of respondents expected that apartment prices would remain unchained, while the same portion of people expect office prices to decrease due to an emergence of ‘work from home’ culture brought about by the pandemic.

Nevertheless, the overall outlook was optimistic, with the majority of those surveyed saying that they would still hold more than 40 per cent of their net worth in real estate, confirming the long-standing perception that real estate is still the most popular form of investment in Cyprus.