Residential Property Price Index up in the first quarter of 2021

The Residential Property Price Index (RPPI) recorded a recovery in the first quarter of 2021, on a quarterly basis, after two consecutive quarters during which prices fell, according to the RPPI compiled by the Central Bank of Cyprus (CBC).

The increase was mainly due to an increase in apartment prices.

More specifically, the CPI (houses and apartments) recorded a quarterly increase of 0.5% compared to a decrease of 0.2% in the fourth quarter of 2020, while on an annual basis it recorded an increase of 0.9%, compared to 0.8% in the previous quarter.
 
The rise of the Index, according to the CBC, is mainly due to the 1.2% increase in apartment prices, compared to the previous quarter. House prices rose marginally by 0.2% over the same period. House prices increased by 0.2% on a quarterly basis, while apartment prices increased by 1.2%.
 
On annual basis house prices increased marginally by 0.2% while apartment prices increased by 2.5% compared to the corresponding quarter of 2020.
 
According to the CBC, the increase in prices per type of housing seems to reflect the enhanced preference of buyers and investors for apartments in relation to homes in most districts of Cyprus, while in Limassol and Larnaca there seems to be more demand concerning the smaller houses.

It also noted that "according to real estate market professionals, in most districts there is an increased demand from domestic buyers, mainly for apartments and houses of smaller size and value than in the past."

According to the CBC, this may be due to the fact that buyers wish to benefit from the state scheme that subsidizes interest rate for first home buyers or are buyers wishing to purchase holiday homes as well as investors who but to let.

On the other hand, the CBC notes that there is a reduced interest in luxury real estate in coastal areas due to the abolition of Cyprus Investment Program.
 
According to the CBC, in the first quarter of 2021 the RPPI on a quarterly basis increased in Limassol, Larnaca and Famagusta districts, while house prices fell in Pafos and remained stable in Nicosia.