2024 was a year filled with various events and proved to be quite challenging for the real estate market of Northern Cyprus.
A significant decline in activity was recorded in the primary real estate market. Despite some positive dynamics at the beginning of the year, demand for housing in the primary market dropped sharply later on. According to the Maprex primary real estate database, while there were an average of about 800 unit sales per month in the first quarter of 2024, by the fourth quarter, the sales volume had fallen to an average of 300 units per month - a decline of more than 60%.
The largest developer in Northern Cyprus, Afik, which accounts for approximately 15% of all housing under construction, even reported a negative sales balance at the end of 2024. This was due to buyer defaults, resulting in over 100 units being returned to the market.
Net sales (sales minus returns) on the primary market by month in 2024, number of units (for the primary market as a whole - on the left and for the largest developer Afik - on the right)
Factors such as rising interest rates, new tax policies and a less favourable economic environment have led to many potential home buyers postponing their purchase decisions, and property owners who have exceeded the established limit on the number of properties they can purchase have been forced to sell their excess housing on the secondary market at a significant discount. At the same time, developers are in no hurry to reduce prices on the primary market, so demand has largely shifted from the primary to the secondary market.
According to the Maprex primary property database, in 2024 the median price of apartments increased from £425,000 in January to £456,000 in December (+7.3%). The increase in apartment prices is primarily due to a change in the supply structure - inexpensive units (studios and 1+1 apartments) are being sold on the market first, while due to the uncertainty in the market, developers are in no hurry to put new projects on sale. At the same time, the median price of villas even decreased slightly - from £179,000 in January 2024 to £172,000 in December (-4%).
Median price of housing (apartments and houses) on the primary market by month in 2024, thousands of pounds
The median price per sq. m for apartments in 2024 increased from £2,204 per sq. m in January 2024 to £2,287 per sq. m in December (+3.8%), while prices per sq. m for houses were stable for most of 2024 at around £2,180 per sq. m.
Median price of housing (apartments and houses) on the primary market by month in 2024, pounds per sq. m
Sell-out rate of housing on the primary market at the end of December 2024 was 53%, in the fourth quarter, the sell-out rate increased from 51 to 53% against the background of limited supply - not a single large project was launched on the market at the end of the year. Studios and small 1+1 and 2+1 apartments are selling out fastest on the market. At the end of December 2024, the sell-out rate of studios was 60%, 1+1 and 2+1 housing - 50%. It is worth noting the significant increase in the sell-out rate of 3+1 housing - if at the beginning of the year it was 39%, then at the end of the year it approached 50% (this is also due to the limited supply of new housing of this type on the market).
The level of housing sales by number of rooms in 2024, by month, %
The highest level of housing sales among the regions of Northern Cyprus is in Iskele - 56% as of December 2024, the lowest in Lefke - 47%. As of 2024, the level of housing sales in Iskele decreased by several percent, while in Kyrenia and Famagusta it increased significantly - by 10% and 7%, respectively, and after March 2024, the level of housing sales in Lefke increased by more than 15%.
The level of housing sales by districts of Northern Cyprus in 2024, by month, %
Note: The drop in the level of housing sales in the Lefke region is due to the addition to the database and the start of sales of large complexes of the developer MMT
The structure of buyers is also changing. The share of foreign home buyers has decreased, primarily from Russia and Iran. New restrictions on residence permits for rent and purchase, ownership of only one property by foreign citizens, and the closure of foreign and trust companies have caused widespread concern among foreigners, many of whom view these measures as an attempt to restrict their rights to purchase and own property. Economic and political problems in these regions may also have contributed to the decline in interest. At the same time, there has been a noticeable increase in the number of Turkish buyers entering the Northern Cyprus property market. This growth is helping to stabilize certain areas of the market, as more and more Turkish citizens seek to purchase residential property in the region for residential or investment purposes. The German and English buyer segments remain stable, demonstrating a steady interest in Northern Cyprus properties.
Northern Cyprus Residential Property Market Forecast 2025
The North Cyprus property market is set to see a sharp decline in sales in 2024 due to new tax rates, stricter residency rules for foreigners and limited land supply. The market is in a period of uncertainty in early 2025 and the outlook for the market will largely depend on the actions of the North Cyprus government. There may be further legislative changes in the market that could either stabilize or further disrupt the market. The property market may begin to stabilize, provided that the government adjusts tax policies and residency rules for foreigners to encourage investment.
In early November 2024, the government officially acknowledged the market decline and, under pressure from circumstances, is reviewing the laws it has adopted. According to government officials, the changes are likely to be made before February 2025. As of early 2025, it was reported that the government had extended the deadline for selling excess properties (more than 1) to 7 years (with a 1% fee for each excess property) and extended the registration and title application deadline until February 21.
The question of whether Northern Cyprus can restore the confidence of foreign buyers remains an open one and is highly relevant to the future development of the region. In an attempt to curb the influx of foreign capital, the government has raised taxes and introduced quotas in some regions to limit foreign ownership of property. While this may reduce demand from foreign investors, it also risks discouraging investment in the region. The government’s approach to raising taxes from 8% to 17.5% and requiring foreign buyers to pay taxes despite not yet having received approval to purchase property has caused an outflow of foreign investors. Many investors who have already paid taxes are now waiting for approval from the government, with some waiting for years.
Another problem in the market is the limited supply of available land and restrictions on development. In order for Northern Cyprus to meet the growing demand, the government needs to significantly increase the supply of land. One possible solution is to create new land. The creation of new land is primarily possible through reclamation projects, such as filling in parts of the sea.
In summary, it can be assumed that demand for real estate will remain high in 2025, prices will be stable, but the lack of affordable supply and restrictions on foreign investment will hinder the development of the market.
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