The residential property market in Famagusta has become booming in the last five years and the area has met an enormous increase in demand of privately owned holiday homes. Famagusta property refers primarily to Protaras, which is the main attraction for property investment in the area along with Ayia Napa and Paralimni.
Ayia Napa targets the young and has an exciting and eventful night life, while Protaras is seen as a more tranquil family destination. As Protaras and Ayia Napa have been world renowned as tourist resorts, more and more people both locals and foreigners are interested in buying property in the area, either for private use or for short and long-term investment. Competition is intense and the commercial streets are filled with agents and developers selling local property. Prices have been rising by approximately 15%-20% each year over the last 5 years. The good news is that Protaras and the surrounding areas currently present the best capital gains potential on investment property in Cyprus.
Around 95% of property purchasers in Protaras are foreigners, while 85% of this figure consists of British purchasers. Long and short-term investors are also beginning to perform a very significant role in annual sales volumes in the area. Demand has been high for holiday homes which form the number one investment choice. However the past years retiree numbers have showed upward trends in Cyprus, so the area has seen an increase in the number of retirees purchasing in Famagusta. The increase in demand for retiree accommodation has encouraged a further growth curve in the property market here. Due to amplified demand, investors have intensified their activity in this sector.
Properties in Protaras are lower in price than in other similar towns. The fact that demand for Paphos properties started a few years earlier than in Protaras in addition to being a bigger town at the time with better infrastructure, channeled the attention from foreign purchasers to Paphos. At present, properties in Paphos range in average 20%-30% higher in price than in Protaras creating greater buying power for holiday home buyers in Protaras.
Demand for property in Protaras is still very strong and this is evident from the fact that often supply does not meet demand. In Addition to scarcity of land, this demand regularly increases labour and material costs and steadily pushes prices upwards. If the demand continues to be as strong as it is now, then prices are expected to increase in the same way as in Paphos or Limassol over the next two to five years.
Predictions for investment opportunities
The property industry in Famagusta is on the positive aspect of the property cycle, and an increased demand and expectations for the future implies it has not yet reached the peak of its potential.
Prices in Protaras are significantly lower than other similar properties in Paphos and Limassol. Considering Protaras has a developed infrastructure and is considered to be a newly established tourist resort, the gap in prices shows the market’s buying power is still very strong compared to other similar areas. The general opinion is that the value of property purchased here is relatively high and the property market will continue to thrive steadily.
Developers have been selling their properties before starting the construction process. Profits are sufficient for investors and developers to cause an increased demand and then an increased supply of developed properties.
The wave of foreign investors is expected to get stronger, considering many investors have been liquidating significant profits and reinvesting their money in real estate here. This, combined with the fact that prospects on the English property market are not very optimistic, encourages many investors to diversify their property portfolio in Famagusta area.
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