The real estate scene in Cyprus is evolving, with the Buy to Rent (BtR) model leading the way. Investors find the strategy appealing as it offers a consistent income from renting out properties, the chance for property values to increase, and tax benefits. It's also a good way to protect against inflation.

Cyprus is an attractive place for this model due to its lovely weather, rich culture, and popularity with tourists looking for short-term rentals. The country's stabilizing economy and EU membership add to its appeal.

What the BtR Model is and Why it Works in Cyprus

The BtR model encompasses two main strategies: Build to Rent, where developers focus on creating residential spaces specifically for rental purposes, and Buy to Rent, where investors purchase existing properties to rent out. Both strategies aim to cater to the growing demand for rental accommodations, offering long-term income potential and addressing the housing needs without the intent of immediate resale.

This model's traction in Cyprus can be attributed to increased property transactions driven by both local and foreign demand, underscored by a significant rise in apartment transactions. A recent report highlighted a record €5.2 billion in real estate transactions in 2022, with a notable increase driven by companies relocating to Cyprus and strong domestic demand.

Despite the challenge of rising building material costs, which have increased by about 30% over two years, the apartment sector has shown remarkable resilience. This is fueled by the combined forces of domestic and foreign demand, enhanced by Cyprus's tourism recovery. 

In Limassol and Paphos, apartment prices have surged by 13.94% and 16.33%, respectively, outpacing the growth in house prices and indicating a strong demand for apartments. Additionally, property sales dramatically increased by 29.6% year-on-year to 13,409 units in 2022, reaching the highest level since 2008, which signifies robust demand.

The attractiveness of Cyprus to foreign homebuyers is bolstered by a 32.1% increase in tourist arrivals in the first half of 2023. Combined with favorable investment conditions and the ease for foreigners to buy property, this finding underscores the potential for sustained growth in the real estate sector. The preference for apartment investments over houses is shaped by economic factors, including a slow GDP growth yet a resilient housing market performance, with rising rental yields making apartments a lucrative option.

Cyprus's real estate investment landscape is undergoing a significant evolution, with the BtR model at the forefront of this change. The focus on apartment living is driven by a blend of economic resilience, strategic investment incentives, and a demand shift, positioning Cyprus's real estate market for future growth and sustainability.

Looking to reshape your investment strategy in Cyprus's booming real estate market? Contact me today to arrange a meeting over coffee. We will walk through the latest investment opportunities, helping you make the best choice for your future. Reach out now and take the first step towards your next opportunity in Cyprus.

Until Next Time,

Nicolas Yiallouros