IMPORTANT UPDATE: As of 1 November 2020, Cyprus cancelled its popular citizenship by investment program. This means that investors will no longer be able to acquire Cypriot citizenship and a passport by investment directly. However, the Cyprus Golden Visa provides an alternative path to permanent residency through investment. Those still looking for European citizenship can apply to the Malta citizenship program, which offers a direct investment route to a Maltese passport.
Returns (yields) on real estate in Cyprus have always been at the lower end, but the 2013 bail-in has encouraged people to invest in real estate, and demand is on the rise.
Returns on the lower end
Returns are the income of a property let on the open market (i.e. the rent) as a proportion of the prevailing market value. The returns are historically low since prior to the 2008 real estate crisis there was a healthy capital appreciation for most properties amounting to five to seven per cent p.a. The yields at the time (2008) compared with the deposit rates of approximately 5% showed a return of 4%-5%. Nowadays the situation is different and returns have been reduced say for apartments to around 4%, whereas there is no expected short-term capital appreciation. The tragic situation of Cyprus as a result of the 2013 bail-in has encouraged people to invest in real estate since, part of the market at least, doubt the solidness of local banks. Of course, out of the rental value/income, one must deduct taxes and other charges that go with the ownership of real estate (provided again that the tenant undertakes his own common expenses and other charges). So, at the end and assuming 30% for expenses real estate investment by comparison to deposits has the upper hand (government bonds excluded).Real estate has the advantage that you can mortgage it to secure a loan.Below is a table of real estate returns which is not strict but depends on many factors. The table (prepared by the local RICS association) shows not large variations over the years (2010-2016) but higher returns are shown for high-cost investments which entail higher investment risk and uncertainty, as well as increasing maintenance/management cost. As such these show a return of 6%, hotels 10%-12% etc.
