Passports: indicator for real estate.

According to the recently published financial report of the Central Bank of Cyprus, more stringent criteria introduced earlier during the year to obtain a Cypriot passport have affected the sale of real estate.

Due to the sharp increase in demand for real estate in the first months of 2019, a slight decrease was recorded after the recent strengthening of the criteria for the Citizenship by Investment program on the island. Sales increased 13.7% year on year for the period January-October 2019. Over the same period, the number of real estate sales to local buyers and foreign buyers also increased by 22% and 4.7%, respectively, which indicates that the demand for real estate comes from both local residents and foreigners.

However, the report of the Central Bank of Cyprus notes that if this period was divided into the period before the implementation of more stringent program criteria (January-May 2019) and after implementation (June-October 2019), then demand grew by 48% and decreased by 5 , 1% respectively among local residents; among foreigners: an increase of 20.2% and a decrease of 8.5%, respectively.

At the same time, housing prices are showing moderate growth, with the exception of the coast of Limassol and Larnaca. There is concern that a recorded price increase in these two areas may extend to others. “Areas with high price increases need careful monitoring, as well as monitoring potential secondary effects to other areas,” the report said.

Meanwhile, the European Systemic Risk Board (ESRB) assessed the residential real estate sector in Cyprus at the recovery stage, also assessing that the likelihood of risks was limited. According to the latest statistics, the report shows that in the first half of 2019, investments in homes reached 760 million euros (7.1% of GDP), and investments in other buildings and structures amounted to 473 million euros (4.4% of GDP).