THE INCREASE in tourism and home-sharing practices on platforms like Airbnb has led to a spike in property price and rental increases especially in Limassol, according to recently-released findings by DANOS International Property Consultants (DANOS / BNPPRE).
The report underlines the importance of tourism as a driving force of the Cyprus economy, attracting large investments that lead to upgraded properties and contribute to the steady improvement of the island’s real estate market.
At the same time, the country’s highly sought-after passport (through investment) is beginning to pay off with dozens of foreign investors purchasing new properties in Cyprus and gaining residency rights.
More specifically, according to DANOS data for the January-March 2019 period, average apartment prices rose by 1.6%, compared with a 1.5% increase in the corresponding period of 2018, driven by a significant 2.5% increase in the selling prices of flats in the Nicosia area.
The going rates in Limassol meanwhile, increased to 1.8%, and to 0.7% in the other cities and areas across Cyprus.
Meanwhile, increased demand in properties with the purpose of leasing these out short term for tourism accommodation purposes (Airbnb-style) has also played a decisive role in the increase of prices.
Demand for commercial properties with a particular focus on office spaces and retail buildings also rose in the first quarter of 2019 with prices for high-end office space and stores up by 3.5% and by 2.1%, respectively, compared to the first quarter of 2018 with growth rates even higher in Limassol at 4.6% and 4%, respectively.
Furthermore, investor interest in hotels in the first three months of 2019 saw a 5% rise in the number of new building permits.
In 2019 DANOS is expecting further positive growth due to the higher demand and this is expected to stabilise over the next couple of years.
The most significant issues related to the real estate are the high volume of NPLs, the large number of properties that now are under bank ownership, the political pressures, the government policy in regard to housing and lastly the Brexit uncertainty, said DANOS.
Indicative sale and rental prices for Limassol
Asking prices for apartments on the seafront fetch €4,000 /sqm to €10,000 /sqm in central areas from €2,000 /sqm to €4,000 /sqm, central seafront plots range from €800, houses on the seafront are around €4,000/sqm (including central areas) and for commercial property its around €4,000 /sqm.
Rental values for apartments at seafront start from €12 /sqm (including central areas). For commercial properties on the seafront, the range is from €20 /sqm to €30 /sqm and up to €25 / sqm in central areas of the town.
The types of properties that are mostly in demand are apartment units in town centres and houses in sought-after suburbs.