Residential price growth slows in Cyprus
House price growth in Cyprus showed a slight slowdown in Q1 of 2024, while apartment prices continued to rise.
The Central Bank of Cyprus House Price Index, which includes both houses and apartments, experienced a deceleration in growth on both a quarterly and annual basis. It increased by 1.6% from the previous quarter, compared to a 2.3% increase in the last quarter of 2023. This growth was driven by a 0.8% rise in house prices and a 3.4% rise in apartment prices.
Annually, house prices increased by 7.8% in the first quarter of 2024, down from an 8.3% rise in Q4 of 2023. In contrast, apartment prices grew by 13.9%, while detached house prices rose 4.7% in the same period.
The real estate market is showing signs of slowing down. This trend is linked to a normalization in demand, evidenced by only a marginal increase in sales documents, combined with rising supply, higher borrowing rates for home purchases, and modest decreases in construction material costs.
Regional variations are notable. In Limassol, increasing supply is meeting demand, while Larnaca and Paphos face limited supply despite rising demand. Nicosia has seen an increase in housing supply, and although Famagusta’s supply remains constrained, new modern housing units are being introduced.
On a quarterly basis, house prices in the first quarter of 2024 rose the most in Paphos and Famagusta (3.1% and 4.4%, respectively), while increases were slower in Nicosia, Limassol and Larnaca (0.2%, 1.5%, and 2.2%, respectively). Annually, house prices accelerated in Paphos and Famagusta (3.3% and 2.6%, respectively) but slowed in Limassol, Larnaca and Nicosia (0.3%, 1.1%, and no change, respectively). Apartment prices increased in all provinces, with Famagusta showing the highest rise at 10.7%.
According to Ask Wire’s latest report for Q2 of 2024, titled “Stable Property Purchase and Rental Prices, While Reductions Follow,” property prices increased annually by 3.5% for apartments, 1% for offices and 0.6% for holiday apartments.
For the third quarter of 2024, Ask Wire CEO Pavlos Loizou anticipates a decline in property prices for high-value investments and residential rentals. He attributes this downturn to high interest rates, increased construction costs and regional instability.
