Paphos and Famagusta Experience Sharpest Increases
The real estate landscape for early 2024 shows a mixed picture. According to the Central Bank of Cyprus (CBC) House Price Index, which tracks both houses and apartments, house price growth has slightly slowed, while apartment prices continue to climb.
In the first quarter of 2024, the CBC House Price Index grew by 1.6%, a decrease from the 2.3% increase seen in the last quarter of 2023. This growth was fueled by a 0.8% rise in house prices and a more substantial 3.4% rise in apartment prices. On an annual basis, house prices increased by 7.8%, down from 8.3% in late 2023. Apartment prices, however, saw a robust increase of 13.9%, compared to a 4.7% rise in house prices.
The market’s cooling trend reflects a normalization in demand, with only a slight uptick in sales documents. This is occurring alongside rising supply, elevated borrowing costs for home purchases, and small reductions in construction material prices.
Regionally, trends vary. Limassol is balancing growing supply with steady demand, while Larnaca and Paphos face supply constraints despite increasing demand. Nicosia has seen a boost in housing supply, and Famagusta, though constrained, is seeing the introduction of new modern housing units.
Quarterly data shows that house prices rose most in Paphos and Famagusta, with increases of 3.1% and 4.4%, respectively. In contrast, Nicosia, Limassol, and Larnaca saw slower growth rates of 0.2%, 1.5%, and 2.2%, respectively. Annually, Paphos and Famagusta experienced faster house price growth (3.3% and 2.6%, respectively), while Limassol, Larnaca, and Nicosia saw slower increases (0.3%, 1.1%, and no change, respectively). Apartment prices rose across all provinces, with Famagusta showing the highest increase at 10.7%.
Ask Wire’s recent report for the second quarter of 2024, titled “Stable Property Purchase and Rental Prices, While Reductions Follow,” indicates that annual price increases were 3.5% for apartments, 1% for offices, and 0.6% for holiday apartments. Looking ahead to the third quarter of 2024, CEO Pavlos Loizou forecasts a decline in property prices for high-value investments and residential rentals. He attributes this expected downturn to high interest rates, rising construction costs, and regional instability, which are likely to affect market stability and long-term investment decisions. Additionally, an increase in new property supply is expected as some projects near completion and others continue.
Source: Kathimerini.com.cy