BRACHA - Executive Summary Series: Cyprus Market Overview

BRACHA - Executive Summary Series: Cyprus Market Overview

Known as the "Jewel of the Mediterranean," the birthplace of the goddess of love, Aphrodite, and once an integral part of the British Empire.

BRACHA - Executive Summary Series: Cyprus Market Overview

Known as the "Jewel of the Mediterranean," the birthplace of the goddess of love, Aphrodite, and once an integral part of the British Empire, Cyprus has always been an exquisite blend of natural beauty and a haven for business opportunities.

The island, with a coastline spanning 5.2 thousand miles and a total population of 1.24 million residents, boasts a GDP of $28.4 billion, reflecting a 6.6% growth from the previous year. The estimated GDP per capita stands at $29,637.

When examining the key drivers of the GDP, we find consistent contributors such as Financial Services (21%), Healthcare and Education (19%), Travel (21%), and Real Estate (15%).

A review of Cyprus' economic history reveals an impressive 48 consecutive years of sustained growth.

Source: (click here)

Moreover, due to the island's abundant natural resources and its strategic location as the Mediterranean corridor, an increasing number of corporations are entering the Cypriot market, resulting in rapid population growth.

This is evidenced by the meteoric surge in demand for exported commercial goods, which rose by 41.2% in the first quarter of 2023 alone. (source)

Another significant factor is the discovery of various natural gas drilling zones, such as Aphrodite, Zeus-01, and Cronos-1, in the territorial waters surrounding Cyprus. Successful ventures in these projects are expected to generate tens of billions of dollars. Estimates suggest that by 2027, natural gas resources will be fully operational, almost guaranteeing further population and economic expansion in the near future. (source)

Image: Turkish offshore drilling ship “the YAVUZ” in northern Cyprus.

As the economy flourishes and infrastructure, industries, and education improve, more individuals are choosing to relocate to the island, resulting in a stronger workforce. This is evident in the reduced unemployment rate, currently standing at 7.2%. (source, p 14)

(source, p 14)

The economic growth directly influences the real estate market, which accounts for 15% of Cyprus's GDP. (source, p 19)

Considering the annual volume of real estate transactions, on average, a residential property is sold in Cyprus every 30 minutes, with an average cost of $251,000 (estimated at $5.6 billion in residential real estate transactions per year).

(source, p 21)

When calculating the return on investment (ROI) for both capital gain and annual yield for an average 1+1 bedroom rental property, the ROI is approximately 10% for capital gain and 5% for yield.

In Northern Cyprus, however, real estate investments have proven to be significantly more lucrative, with an average capital gain of 15% and an average yield of 8%. In some cases, developers are so confident in the real estate market's growth that they are willing to guarantee an 8% rental yield for the next three years.

The developers' confidence stems from the proven track record of real estate performance in Northern Cyprus and the soaring demand for both travel and relocation. For instance, Northern Cyprus recently experienced a remarkable 33.7% growth in new immigrant relocations. (source)

In conclusion,

The Cyprus real estate market has demonstrated robust and steady growth in the past five years. Considering current events and the economic outlook, Cyprus offers a compelling real estate investment opportunity, particularly in Northern Cyprus. The country is making substantial investments in infrastructure, energy, and tourism, including, for example, a whopping $438 million investment in a new airport capable of accommodating over 10 million visitors annually.

With the remarkable improvements in infrastructure, the promise of a better quality of life, and increasing immigration, the population has surged by an impressive 33.7%.

Due to the high demand for travel, a growing population, a strengthened economy, and an improved quality of life, real estate developers in Northern Cyprus are offering unique investment opportunities, with some even guaranteeing investor yields.

For more information on how you can capitalise on Cyprus's booming real estate market before this opportunity passes, please contact our team, and a representative will get in touch with you shortly.

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On average every 30 min a residential property is sold on Cyprus.
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