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Strong growth in Cyprus property prices

The RICS Cyprus Property Price Index for Q3 2017 reports strong growth in property prices across the island with an annual increase of 7.4% in apartment prices and a 4.2% increase in house prices.

Cyprus property pricesTHE THIRTY SECOND publication of the RICS Cyprus Property Price Index reports that the average price of residential apartments and houses across the island have risen by 17.4% and 4.2% respectively since the third quarter of 2017.

Over the same period of office prices have risen 8.8%, warehouse prices by 4.4% and retail prices by 4.5%.

Significant price rises were recorded in all districts and asset classes, with Paphos and Paralimni reporting slightly lower increases than the other districts.

The highest increase was reported in the southern coastal town of Limassol with 13.2% and 14.3% respectively, for offices the highest increase was in Nicosia with 19.5%, for warehouses and retail the highest increase was in Nicosia with 7% respectively.

Quarterly price changes

Compared with the 2nd quarter of 2017, prices of apartments and houses rose by 0.5% and 1.7% respectively. Limassol reported the largest quarterly increase with apartment and house prices up 4.1% and 5.5% respectively.

Prices of holiday homes over the quarter also rose with the prices of apartments rising by 2.5% and houses rising by 1.80%. Limassol reported the highest rise in holiday apartments with an increase of 4%, while Paralimni reported the highest quarterly rise for holiday homes at 2.9%

Rental values

Across Cyprus, on a quarterly basis rental values increased by 4.6% for apartments, 2.5% for houses, 1.5% for retail premises, 5.7% for offices and 0.9% for warehouses.

Compared to Q3 2016, rents increased by 12.5% for apartments, 9.2% for houses, 6.1% for retail premises, 22.4% for offices and 1.6% for warehouses.

What does the future hold?

Some economists are warning that the recovery in the Cyprus property market is short lived and expect prices to fall in a couple of years.

Speaking to the Cyprus Mail Marios Mavrides who teaches economics at the European University of Cyprus said that the current increase in property prices, which fell after the peak of the property bubble nine years ago, is likely to come to a halt in two years.

“Prices have not fallen enough,” said Mavrides who is also a Disy MP.

Economist Marios Clerides said that that he too feared a possible drop in real estate prices.

“I am concerned about property prices because we have created artificial demand with the passport scheme and the sustainability in this area,” he said. “The real estate market in Cyprus is fragile”.

Readers' comments

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  • Aggis Demetriou says:

    BOC want to do some kind of deal regarding the CHF loans they roped me in to, last week they sent two separate valuers who are registered with RICS (Cyprus) it’s 2 the same adjoining semidetached houses the valuations came back with €98,000 price diferrence with such, how can anyone believe the property price index?

  • Aggis Demetriou says:

    Prices fall great I buy more, rental returns here are much better than London with some of my stock hitting 18% return annually, the rental market here is fantastic!!

    A great place to invest.

  • Kokos says:

    I caution to note “the fallacy of percentages”. The RICS index has decreased by c.40% since Q4 2009 (when it was launched at a base of 100). Thus, a 7.4% annual increase, although impressive, is 4.4 in absolute terms (7.4% * 60, which is the current base). Thus, the index remains c.36% lower than on its launch date.

    I also note that the index tracks new, city centre units. Most of the properties that have been acquired for holiday home purposes are likely to have faired worse during the downturn (secondary locations, oversupplied markets, etc) and will fair worse in the rebound (due to their location, type, and now, age).

    Ed: I believe there’s a further ‘fallacy’ – the index isn’t adjusted for inflation. So in reality I expect the index is around 40% (possibly more) lover than its launch date.

  • Richard says:

    I think the market is fragile – and considering all the issues – I think it will remain this way for some time. Some heads up on the opportunities emerging vs what is available in the way of housing stock would be useful. Whilst I accept that different cultures require different things – we also need to try and see where some of the areas overlap. This way – the market may be less fragile.

  • Deanna says:

    Well, as was said in the first post, we’re targetting a different audience now……offshore Cyprus.

  • Ian says:

    Too true, the real estate market is fragile……..

    Why are we trumpeting the number of building permits issued, when there are hundreds if not thousands of ready-built unoccupied and unloved properties over the island.

    Ed: Many of the unsold properties were targeted at a different market, mostly Brits. Other nationalities have different requirements.

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