Cyprus residency applications on the up

Photo: Sergey Yeliseev

Cyprus was not the first country to offer residency in exchange for property purchases and it certainly not the last: Spain, Portugal and Greece all offer non-EU buyers citizenship as an incentive to invest in their real estate. While Spain and Portugal both require a minimum investment of €500,000, though, Cyprus has a lower threshold of €300,000.

As a result, a rising number of Chinese buyers have shown interested in Cypriot homes, driving much of the activity in the sluggish housing market in recent months.

Indeed, Cyprus’ property market has become increasingly reliant on Chinese interest, as home sales continue to plunge. The latest figures from the Department of Lands and Surveys show that 394 contracts for property sale were registered in November 2013, 11 per cent lower than November 2012.

Sales fell in all districts across the country, with Famagusta seeing transactions fall by 37 per cent. Larnaca deals dropped 31 per cent and Limassol sales slipped 30 per cent. Paphos, traditionally the most resilient thanks to its strong tourist appeal, saw sales fall 18 per cent.

24 per cent of sales were accounted by international buyers, while 76 per cent went to domestic buyers. During the first eleven months of 2013, sales to overseas buyers slumped 31 per cent compared to 2012.

Despite the negative trend, though, sales in Limassol rose 21 per cent year-on-year. At the same time, November’s overall fall of 11 per cent is far less severe than in previous months, a potential sign that a slowdown is starting to form.

In May 2013, officials upped the incentive for the Golden Visa, extending the residency to the children of the respective applicants, providing they are students aged under 25 or financially dependent on their parents.

Now, 900 applications have been received by the scheme, a cabinet meeting under President Nicoas Anastasiades revealed, generating almost €300 million for the economy, with almost €270 million paid for immovable property.

In August this year, the Cyprus Mail reported that Chinese buyers were the main applicants, while Cyprus Property News notes that Russian applicants have reduced in number following the banking crisis this year, which saw many depositors’ savings disappear.

Can continuing residency applications from Chinese buyers help to turnaround the Cypriot property sales slump? Estate agents will be waiting to see what the New Year brings...