Cyprus is a small island nation in the eastern Mediterranean Sea, known for its rich history, culture, and natural beauty. Cyprus is also a popular destination for property investors, who are attracted by its high quality of life, strategic location between Europe and Asia, favorable economic and tax framework, and recovering real estate market.
But where are the best locations for property investment in Cyprus? This article will explore some of the most promising areas for different types of investors, whether they are looking for rental income, capital appreciation, or residency and citizenship benefits.
Best Locations in Cyprus
Nicosia: The Capital City
Nicosia is the capital and largest city of Cyprus, as well as the administrative, financial, and commercial center of the country. Nicosia offers a variety of property options, from modern apartments and houses in the city center to spacious villas and plots of land in the suburbs.
Nicosia is ideal for investors who are looking for long-term rental income from local tenants, such as professionals, students, and expatriates. Nicosia has a high demand for rental properties, especially near the universities, hospitals, and business districts.
According to the Central Bank of Cyprus (CBC), apartment prices in Nicosia rose by 3.4% year-on-year in the first quarter of 2022, while house prices fell slightly by 0.2%. The average rental yield in Nicosia is around 4%, which is higher than the national average of 3.8%.
Limassol: The Cosmopolitan Hub
Limassol ranks as the second biggest city in Cyprus, serving as the island’s primary port and a major tourist destination. Limassol is known for its vibrant nightlife, cultural events, and luxury lifestyle. Limassol attracts a diverse mix of visitors and residents, including tourists, retirees, businesspeople, and foreign investors.
Limassol is ideal for investors who are looking for capital appreciation and short-term rental income from holidaymakers. Limassol has a strong demand for high-end properties, especially near the seafront and the marina.
Apartment prices in Limassol rose by 6.9% year-on-year in the first quarter of 20221, while house prices increased by 2.1%. The average rental yield in Limassol is around 3.9%, which is slightly above the national average of 3.8%.
Paphos: The Cultural Capital
Paphos is a coastal city in the southwest of Cyprus and one of the most popular tourist destinations on the island. Paphos is famous for its ancient sites, such as the Tombs of the Kings and the House of Dionysus, as well as its natural attractions, such as the Aphrodite’s Rock and the Akamas Peninsula. Paphos was also designated as the European Capital of Culture in 2017.
Paphos is ideal for investors who are looking for residency benefits through property investment. Paphos has a large expatriate community, mainly from the UK and other European countries, who enjoy the relaxed and friendly atmosphere of the city. Paphos also offers a range of property options, from affordable apartments and townhouses to luxurious villas and golf resorts.
According to the CBC, apartment prices in Paphos rose strongly by 10.2% year-on-year in the first quarter of 20221, while house prices increased by a more modest 4%. The average rental yield in Paphos is around 4%, which is equal to the national average of 3.8%.
Famagusta: The Emerging Market
Famagusta is a district in the east of Cyprus that includes several towns and villages, such as Ayia Napa, Protaras, Paralimni, and Deryneia. Famagusta is known for its sandy beaches, crystal-clear waters, and lively entertainment options. Famagusta is also home to some of the most significant historical monuments on the island, such as the Venetian Walls and the Othello Castle.
Famagusta is ideal for investors who are looking for growth potential and value for money. Famagusta has a lower property price level than other districts in Cyprus, but it also has a higher demand from both local and foreign buyers. According to the CBC, apartment prices in Famagusta rose by a robust 8.3% year-on-year in the first quarter of 2022, while house prices increased by 2.4%.
The average rental yield in Famagusta is around 5%, which is higher than any other district in Cyprus.
Cyprus offers a variety of opportunities for property investors, depending on their goals, preferences, and budget. Whether they are looking for rental income, capital appreciation, and residency benefits, investors can find a suitable location and property type in Cyprus.
However, before making any investment decision, investors should do their due diligence and consult with professional advisors to ensure a smooth and successful transaction.
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