Cyprus property price increase slows down
The Central Bank of Cyprus reported a slight deceleration in the Housing Price Index (HPI) for houses and apartments in the first quarter of 2024.
However, on an annual basis, house prices rose by 7.8% in the first quarter of 2024, compared to a 8.3% increase in the fourth quarter of 2023. Apartment prices surged by 13.9%, while house prices increased by 4.7% during the same period.
High-end residential properties continued to drive the Cypriot market, with total sales reaching €2 billion – a trend that has persisted into 2024.
Foreign buyers acquired 6,900 properties in 2023, marking a 16% increase from the 5,928 properties purchased in 2022, as the Cyprus Residency Program, known as the Golden Visa, has been a significant driver of this foreign investment.
Looking ahead, an anticipated decrease in interest rates by the European Central Bank is expected to lower rates on the island, encouraging more locals to enter the market.
The demand for business space in Cyprus has reached its highest levels in five years, recovering from the effects of Covid-19. Increased foreign investment has boosted demand for office space, particularly modern, Grade A offices, which are expected to remain in high demand throughout 2024.
Nationwide, rental prices increased by 8.5% year-on-year in the first quarter of 2024 and are about 10% higher than in 2019. Office rents, which hit their lowest point in the first quarter of 2022, are now about 14% higher.
Limassol and Larnaca are leading the way, while the capital, Nicosia, is showing a steady recovery. The ongoing transition from older buildings to state-of-the-art, energy-efficient facilities is driving the demand for modern office spaces in Cyprus.
Despite the current supply and upcoming projects, office rents are expected to remain relatively high due to sustained demand and new standards. The office property market in Cyprus is especially attractive, with global companies setting up local operations due to the island’s high quality of life, strategic location and favorable tax system.
[Financial Mirror]
