CYPRUS: Property sales to foreigners drop 8% in January, Paphos still leads

Property sales to foreigners saw an 8% drop in the first month of the year, following a downward trend that saw year-on-year deals drop by nearly half the previous month.

The number property purchases made by European citizens and third-country nationals saw an 8% drop in January 2019, compared to the same month last year, according to the latest data from the Department of Land Registry, with the drop attributed to a decrease in the number of properties bought by non-Europeans.

In January 2019, a total of 107 real estate sales contracts were submitted by Europeans, while 250 sales documents were submitted by non-Europeans, for a total 357 in the month. This compares with a total of 387 sales contracts filed in January 2018, of which 90 were by Europeans and 297 by non-Europeans.

Breaking down the January 2019 data, most property sales to non-European citizens were in Paphos (101), followed by Limassol (69). For the same period last year, Paphos was again the preferred choice for non-Europeans with 105 sales documents submitted, followed by Limassol with 103. Property sales to European nationals in January 2019 were higher in Paphos when 56 properties switched hands, with Limassol seeing 16 transactions.

The drop recorded in January follows the overall drop in sales in December 2018 when some 48% fewer sales documents were submitted compared to the same month in 2017. However, real estate specialists did not appear particularly concerned saying that the drop can be explained with the raise in the VAT tax.

RICS President Thomas Dimopoulos in comments at the time, had said: We reported that the drop occurring at the end of 2018, compared to December 2017, is due to the fact that a 19% VAT was imposed on land sales as of 1/1/2018 which led many people deciding to buy property before the end of 2017.

Echoing the same argument, George Mouskides, President of the Cyprus Real Estate Association (KSIA), confirmed that the decrease was due to the VAT factor, adding that he was not concerned over the issue. He added that one should look at the overall trend of the previous years.

Meanwhile, sales involving foreign buyers in 2018 reached 4,367 out of a total of 9,242 transactions.

That means 47% of property purchases in 2018 involved foreign nationals – with Paphos being the most popular location (40.4%).

Source: The Financial Mirror