Cyprus Economy: Property sales optimism for 2016

Property sales recorded an increase for the second year in a row in 2015, but still remain 60% below the 2000 levels.

The small recovery raises optimism for the sector for an improvement of the situation as both domestic and foreign demand appear to be gaining momentum.

According to new data released by the Land Registry, the deeds of sale rose by 9% to 4952 units in 2015 compared to 4527 in 2014.

In 2014 they rose for the first time after 2010 recording a 20% growth compared to 3767 in 2013. The increase is expected to continue in the current year at the same pace of 2015 or even a little higher pointing out that the whole picture must be seen within the context of the low base (small number of transactions).

"The stabilisation of the economy and the light improvement in the labour market are benefiting the sector. Sales to locals increased by 8,1% reaching 3603 from 3334 in 2014, while sales to foreigners stood at 1349 from 1193 registering a 13,1% increase. In the market there are expectations for an improvement in sentiment following government moves to reduce transfer fees, the promotion of planning incentives and the issuance of title deeds for trapped property buyers.

Interest rate cuts by banks also had a positive contribution. The improvement in the property sector is evidenced by other gauges as well, while the central bank of Cyprus projects a stabilization of property prices. An unknown factor that can greatly affect the sector is the impact the hundreds of foreclosures being prepared by banks in 2016 will have as they will increase property supply.