20 Nov Real estate market remains resilient
Despite global and local challenges, investors are still flocking to buy homes on the island
According to the country’s Statistical Service, the price of Cypriot residential properties was 3.2% higher in the second quarter of 2023 than in the same period of 2022, while sales volumes in the first nine months of 2023 were 20% up on 2022. 46% of those properties were acquired by international buyers. That is the highest proportion of foreign purchases since 2007 and it was led, in no small part, by home-buying employees of around 1,000 international companies that moved to the island in 2022.
Industry experts suggest that Cyprus needs to build an extra 2,000-3,000 homes a year for the next decade to accommodate the ongoing influx of new residents, which has resulted in a scarcity of properties to buy or rent and the local population being increasingly priced out of the market. To help address this, Deputy Minister to the President Irene Piki announced in October that, “The government has elaborated a package of specific measures and mechanisms, addressing both the supply and demand side of the housing market in order to facilitate production of more affordable housing units, mainly by the private sector. This package of instruments will incorporate land use initiatives, fiscal measures, as well as fast tracking of applications.”
Evangelia Eliadou, executive director of Pafilia, one of Cyprus’ biggest property developers, explains why so many international businesspeople are snapping up the nation’s homes: “The country has a unique set of selling points that sets it apart from other destinations, which are sustaining our industry’s strength and resilience. The incentives that surround these fundamentals and make Cyprus even more attractive include the permanent residency scheme, tax advantages, headquartering and business incentives.”
Expanding on the island’s USPs, she says: “What we’ve learnt from experiences like the war in Ukraine and COVID period is that Cyprus will always be a popular destination, because of its ideal Mediterranean lifestyle, location and year-round climate, and that people, especially high-net-worth individuals, always want a plan B. As a country, we’re able to offer them great incentives for lifestyle and investment purchases, for individuals and families, as well as businesses.”
The Cypriot real estate market has maintained its growth momentum with international purchasers despite a challenging last three years. For instance, “Construction costs have increased around 30% and the global economy slowed. As a large family-owned company with a strong reputation to uphold, we decided to absorb as much of the additional costs as possible to protect our brand and maintain the quality of our premium product,” Eliadou insists. In addition, the government ended the country’s popular citizenship-by-investment scheme in 2020. “The passport program had helped to transform our island into an internationally recognized business destination. It opened new markets and brought in more high-net-worth individuals,” she states. “However, transforming Cyprus is not only about government policies. It’s also about us, the private sector, improving the quality of our projects, creating infrastructure and facilities that people want to experience. Even though the real estate market has dramatically changed, Pafilia’s strategy has not. We continue to focus on delivering world-class lifestyle and residential resorts that enrich lives.”
The full-service developer has been following that strategy since it was founded by Eliadou’s father in 1977. Over the decades, it has created a varied property portfolio worth in excess of $3 billion in Cyprus and, more recently, Greece, and delivered more than 2,000 projects that have amassed over 60 international awards. “Pafilia has always had a vision to transform the real estate sector in Cyprus and that’s a goal we are proud to say we’ve reached. Delivering genuine quality, value and absolute customer satisfaction has earned us a place at the forefront of the property industry,” she states. “But our vision goes further, with a keenness to embrace new approaches and keeping our minds open to fresh thinking, consistently challenging ourselves and the norm to reach new standards.”
This perspective has led Pafilia to invest heavily in technology to support all aspects of its business and its clients, notes Eliadou: “Digitalization can also be a tool to help meet demands for sustainability. Properties are a key component of smart, sustainable communities in everything from energy systems to logistics and deliveries, which is something we are passionate about.” That passion is evident in one of Pafilia’s most groundbreaking projects: the Minthis resort near Paphos, which spans about 54 million square feet of one of Cyprus’ 72 Natura 2000 sites, part of an EU-wide network of protected natural areas inhabited by rare wildlife species. “We’re building a long-term sustainable luxury resort that adds a new dimension to Cyprus’ real estate, hospitality and wellness sectors. It’s a unique new destination inspired by its surrounding nature and Pafilia’s concern for environmental and innovative sustainability, local culture and heritage, and social responsibility covers all elements of the Minthis resort,” she stresses.
Inaugurated in 2014, the project has won many awards for its sustainability practices, including for its golf course, as well as being recognized at the World Luxury Spa Awards and being named Europe’s Best Leisure Development at the International Property Awards. “Our current priority is to complete the infrastructure and main facilities, which include a village square full of dining and shopping options. We’ve expanded into hospitality with the resort because our clientele want more than just a property; they want a home with lifestyle benefits that suit them and their entire family,” Eliadou reveals.
Another of the group’s accolade-winning projects is ONE, which was highlighted as Europe’s Best Residential High Rise Development at the International Property Awards 2016. Standing 170 meters above ground in Limassol, with 83 luxury apartments on 37 floors, uninterrupted sea views and a wealth of facilities and services, ONE’s development was masterplanned by the renowned Atkins consultancy and supervised by WKK Architects. “ONE is a pioneering landmark and one of our greatest achievements. It’s not only the first high-rise building in Limassol, but its interiors and facilities are unrivaled in the Mediterranean region,” she enthuses. “In order to bring this outstanding project to life, we employed many international specialists, who brought new skills and helped train the local workforce.”
Eliadou comments that, while numerous European, Middle Eastern and Asian clients have been buying properties from Pafilia and the wider Cypriot real estate sector, few Americans have joined them. “The Cyprus property market is going from strength to strength and offers great opportunities. If an American is interested in Europe, Cyprus is an excellent proposition for them. It offers lifestyle, location, infrastructure, climate and a different, more relaxed way of living. It’s a wonderful place with so much to offer, you need to experience Cyprus for yourself to truly understand its beauty and opportunities.”