The Residential Property Prices Index (RPPI) for the first quarter showed signs of slowing down due to the stricter criteria imposed on the Cyprus Investment Programme and uncertainty created by the coronavirus pandemic.
The RPPI compiled by the CBC, rose by an annual 1.8% in the first quarter of 2020 compared with an increase of 2.2% in the fourth quarter of 2019 and 2.8% in Q3 of 2019.
“The limited increase is due to the reduction of demand for real estate both by foreign investors and local buyers,” the CBC said, adding that the slowing down trend are fuelled by the stricter criteria in the Cyprus investment programme that came into force in mid-2019, while the Covid-19 pandemic renders the climate even more uncertain.
According to the CBC, in Q1 2020 both prices in houses and apartments have registered annual growth amounting to 0.8% and 4.6% compared with 1.5% and 4.1 respectively in the previous quarter.
In the first quarter of 2020, the RPPI recorded a quarterly increase in al districts with the exception of Limassol that fell by 0.3%, the CBC said. Prices in Larnaca rose by 1.7%, in Pafos by 0.8%, in in Nicosia by 0.4% and in Famagusta by 0.3%.
Compared with the first quarter of 2019, the RPPI rose in all districts. Famagusta rose by 3.6%, Larnaca by 3.0%, Limassol by 1.9%, Pafos by 1.4% and Nicosia by 1.2%.
On a quarterly basis (compared with Q4 2019), house prices in Limassol declined by 1% followed by Pafos where they declined by 0.6%. In Larnaca house prices rose by 1.8%, in Famagusta by 0.6% and in Nicosia by 0.2%. On an annual basis, house prices felly by 0.2% in Limassol while Prices in Pafos remained unchanged.
On their part, apartment prices registered Q1 200 the eighth annual increase for the eighth consecutive quarter, with prices in Larnaca showing signs of slowing down.
Apartment prices in Larnaca rose by 5.0% compared with an increase of 7.4% in the previous quarter. Apartment prices in Limassol rose by 7.9% from 7.6% in the previous quarter, 4.3% in Pafos (from 1.6%), 2.4% in Famagusta (0.8%) and 2.3% in Nicosia (1.5%).
Demand for properties buy overseas investors fell by 10.9% and by 4.4% for locals in the first quarter of the year. While demand for properties has been affected by the outbreak of the pandemic, the fall had begun before the appearance of the Covid-19 said the Central Bank.