Nicosia has developed a strong property market within both the commercial and the residential sector and presents some good investment opportunities for Cyprus property purchasers.
With a year round rental market, rather than a seasonal one, Nicosia’s property market differs from that of many other tourist cities on the island.
The commercial property market in Nicosia is very competitive and attracts high profit margins and consequently property prices have been rising steadily and consistently.
Prices have increased as the scarcity of land has gradually become greater.
Nicosia employs a large foreign workforce due to the many international companies now based here. The majority of the foreign labour consists of immigrants looking for improved working conditions and a better quality of life. In addition, Nicosia also attracts a private workforce from other towns of the island since most Cypriot private companies and the majority of its government institutions are based in Nicosia. The workforce in Nicosia is forever growing and in need of increasing amounts of quality housing near their work place. The University of Cyprus along with the largest colleges in Cyprus is also based in Nicosia.
Both foreign and local investment has played a significant role in shaping the demand in the Nicosia property market and capital is invested aggressively each year.
The downturn of the Cyprus Stock Exchange pushed most capital investment towards the property market in preference to the poorly performing stock market. This is, as we know, a phenomenon in many countries. Nicosia’s property market enjoys the full confidence of Cypriot investors due to its very positive performance over the last 15 years.
In the capital city of Nicosia, with a population of 250,000, there are more than a hundred listed development companies, plus many small developers supplying new housing for the growing population. Construction has been growing at such a rate that finding labour has sometimes become a challenge for smaller development companies. Despite the increase in demand for housing, almost all new developments are sold off-plan and most of them before they reach the frame stage.
A new wave of foreign investors has made a strong move in acquiring property in Nicosia during the last year. This is understandable if we consider the English property market is comparatively unsatisfactory and many investors are looking to diversify their portfolio abroad. Many of them seem to prefer the year-long rental contracts of Nicosia to the seasonal rental contracts of other towns.
Investors expect increases in rental return in the near future. Property prices have increased disproportionately to rental increases. Since increase in demand increases prices, the local population’s income will not be sufficient to purchase property. This will increase demand for rentals and thus stimulate a rise in rents.
The property market in Cyprus has changed considerably in the last few years due to political changes and influences in the socio economic structure of the island.
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