The Cyprus Property Market and the Global Recession

People keep talking about the hard times in the Property Market internationally. How far was Cyprus affected? How far is this going to go in terms of time? What will happen if the Sterling Pound does not recover soon? The answer is simple. When the whole world is suffering, Cyprus will also be affected. But what are the consequences…

In a geographically small market like Cyprus, it is amazing how much each area can be different than the rest. Take for example Nicosia. The capital of Cyprus has never been a popular destination among foreign buyers, retirees, holiday home buyers or investors. Its market has always relied on the locals. Local demand showed a marginal reduction but the market remains relatively active and stable.

Limassol traditionally relies on clients from 3 markets, the local, the British and the Russian. The market there was affected by the recession in the U.K., but most of the loss was covered by a relative increase in the sales to the Russians. Local demand also showed a marginal reduction but the overall picture remains positive.

Larnaca was “discovered” by the British buyers during the last decade or so. Although it is the base of the island’s main airport, it has always had lower prices than the rest of the coastal areas. The drop in the demand from the U.K. has affected Larnaca. The same applies on nearby Famagusta. Both areas are trying to cover the reduced demand by promoting their product to Nicosia investors.

Paphos has been affected more than the rest of the island. Traditionally relying on the British second home buyers and the British retirees, the market there is now slower than before.