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Tuesday 22nd June 2021
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Cyprus property prices rising

Cyprus property prices rising says RICSTHE THIRTY-FOURTH publication of the RICS Cyprus Property Price Index reports that the average price of residential apartments and houses across the island rose over the first quarter of 2018.

Price increases have been assisted by improvements in the Cyprus economy and confidence in the banking system which, despite the high levels of non-performing loans (NPLs), has improved the availability of finance contributing to increased sales.

Quarterly property price changes

Compared with the fourth quarter of 2017, prices of residential houses and apartments rose by 1.3% and 2.9% respectively. Nicosia recorded the largest quarterly increase in apartment prices (up 4.7%), while Famagusta reported the largest rise in house prices (up 3.6%).

Residential property prices in Paphos remained stable, while Limassol recorded a slight decline of 0.8% in the price of houses.

Prices of holiday homes also rose over the quarter by 3.4% for apartments and 1.1% for houses. The highest increase for both holiday houses and apartments was recorded in Famagusta where they rose by 1.8% and 3.2% respectively.

Annual price changes

Compared to the first quarter of 2017, prices of houses and apartments rose by 4.2% and 7.8% respectively.

Meanwhile prices for offices, retail and warehouses over the year rose by 10.7%, 3.7% and 3.5% respectively.

Rental values

On a quarterly basis rents increased by 6.5% for apartments, 5.1% for houses, 0.6% for retail, 4.4% for offices and 0.4% for warehouses.

On an annual basis, rents increased by 18.1% for apartments, 10.9% for houses, 4.8% for retail, 18.1% for offices and for warehouses 2.2%.

Gross rental yields

At the end of the first quarter of 2018, average gross rental yields stood at 4.4% for apartments, 2.2% for houses, 5.5% for retail, 4.3% for warehouses, and 5.2% for offices.

The proportionately higher quarterly rental increases compared to quarterly price increases have marginally improved yields for apartments and offices.

The gross rental yield is a useful yardstick as to whether property is over-valued, under-valued or priced correctly. Here is a set of rules of thumb for the housing market from the Global Property Guide:

15% – 20% Very undervalued

10% – 12% Undervalued

8% – Borderline undervalued

6% – 7% Fairly priced

5% – Borderline overvalued

3% – 4% Overvalued

2% – 2.5% Very overvalued

Further reading

RICS Cyprus Property Price Index Q1 2018.

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