Demand for luxury apartments in high-rise developments set to decline

 

Limassol dominated the real estate market in 2023, accounting for 41 per cent of the total sales value across the country in a year a Deloitte report published on Tuesday described as record breaking.

The Cyprus Real Estate Review 2023 revealed that last year closed with a total of 25,400 transactions and €5.6 billion in value. “Limassol continued to dominate the market,” the report said.

All other cities – except for Larnaca – recorded marginally lower sales values compared to 2022.

“Larnaca showed a remarkable increase in sales value, surpassing 2022 by 28 per cent. This was due to both an increased number of transactions and a higher average transaction value.”

According to the report, this is the third consecutive year that Larnaca has shown growth, almost doubling both in value and volume of transactions since 2020.

The continued growth across Cyprus’ real estate sector is attributed mainly to residential transactions, accounting for 61 per cent of the market’s total value (€3.4 billion from 13,200 transactions).

Vacant land transactions (plots and fields) follow, with sales of €1.9 billion across 11,200 transactions, accounting for 34 per cent of the total value.

“This represents a stability in total sales value from 2022, despite the higher number of transactions.”

For commercial space, the report identified fewer transactions than in 2022, however they were higher in value, reaching €121 million.

The report also presented the results of Deloitte Cyprus’ real estate survey, based on the responses of local industry professionals. Findings indicated a consensus among respondents that no substantial changes are expected in the real estate landscape in 2024.

Apartments were expected to remain the most attractive investment opportunity over the next 12 to 18 months, however respondents anticipate that the market for luxury apartments in high-rise developments will most likely decline.

“The steady and continuous growth of the real estate market as shown from our analysis, both in terms of transaction value and volume, showcases the resilience of the sector despite the various economic pressures,” financial advisory and real estate industry leader at Deloitte Cyprus George Martides said.

“These results instil optimism, but also a sense of responsibility to effectively address any future challenges – such as sustainable and green developments, the rapid growth of technology and Artificial Intelligence, government reforms, bureaucracy, affordable housing – and to intensify our efforts in attracting new types of investment from both foreign and local investors. All of these can be achieved through proper planning, collaboration and coordination between the private and public sectors.”