10/01/2024 15:48
Housing prices in the Republic of Cyprus continued their upward trend during the third quarter of 2023, with a notable increase in apartment prices, according to data released on Wednesday by the Central Bank of Cyprus (CBC).
The Residential Property Price Index (RPPI) maintained by the CBC continued to show increases both on an annual and quarterly basis compared to the previous quarters. According to data from the Department of Lands and Surveys, property transactions during the third quarter of 2023 also recorded a rise on an annual basis.
The heightened demand is attributed to both domestic buyers, including those interested in buy-to-let investments, and foreign investors, particularly within the framework of the headquartering policy and other investments.
Regarding construction activity, there has been a decrease in the number of residential buildings for which building permits were issued during the period from January to August 2023 compared to the same period in 2022. This ongoing trend appears to be linked to the continued increase in construction and loan costs.
Overall, the increased demand, coupled with the limited supply of new properties in the market, appears to be the most significant factor contributing to the RPPI's rise during the third quarter of 2023, as in previous quarters.
Changes in the RPPI
The RPPI (houses and apartments) recorded a 2.2% increase during the third quarter of 2023, compared to a 1.5% increase in the previous quarter. The third-quarter increase in the RPPI in 2023 is attributed to a 1.4% rise in house prices and a 3.6% increase in apartment prices.
On an annual basis, there was a 7.6% increase in property prices during the third quarter of 2023, compared to a 7.4% increase in the second quarter of the same year. Apartment prices recorded an 11.5% increase, while house prices increased by 4.9%.
Higher increases in Limassol and Larnaca
Housing prices on a quarterly basis showed an increase in all districts for the third consecutive quarter during the third quarter of 2023. Specifically, Nicosia recorded a 0.7% increase, Limassol 2.9%, Larnaca 2.8%, Pafos 2.4%, and Famagusta 2.8%.
An annual increase in the RPPI was observed in all districts. Specifically, in Nicosia, housing prices increased by 3.9%, in Limassol by 10.1%, in Larnaca by 10.5%, in Pafos by 7.6%, and in Famagusta by 6.4%. The relatively high rate of increase in property prices in coastal districts appears to stem from demand from foreign buyers and investors, especially within the headquartering policy framework.
House prices, on a quarterly basis, increased in all districts. Specifically, in Nicosia, there was a 0.3% increase, in Limassol 1.4%, in Larnaca 2.5%, in Pafos 1.1%, and in Famagusta 4.3%.
On an annual basis, house prices also increased in all districts. Specifically, house prices in Nicosia, Limassol, Larnaca, Pafos, and Famagusta increased by 3.8%, 5.1%, 8.3%, 3.1%, and 9.5%, respectively.
Apartment prices, on a quarterly basis, increased in all districts except Famagusta, where a decrease was recorded. Specifically, in Nicosia, there was a 1.5% increase, in Limassol 4.0%, in Larnaca 2.9%, in Pafos 5.2%, while Famagusta recorded a 1.7% decrease.
On an annual basis, apartment prices increased in all districts except Famagusta. Specifically, during the third quarter of 2023, prices in Nicosia increased by 4.6%, in Limassol by 14.9%, in Larnaca by 13.4%, in Pafos by 18.5%, while Famagusta recorded a decrease of 1.8%, compared to the same quarter in 2022.
Moreover, according to data from the Land Registry, sales documents recorded a 14.4% increase on an annual basis in the third quarter of 2023 (3,830 compared to 3,347 in the third quarter of 2022), reflecting the increased demand for properties.
During the quarter under review, there was a 13.7% increase on an annual basis in the number of properties sold to foreign buyers (1,712 compared to 1,506 in the third quarter of 2022), while the number of properties sold to domestic buyers increased by 15% on an annual basis (2,118 compared to 1,841 in the third quarter of 2022).