The Cyprus Central Bank’s Residential Property Price Index for the third quarter of 2021 reports that the index rose by 0.5% over the quarter following a 0.3% rise in the second quarter and by 1.2% on an annual basis.
However, the price of houses fell in some districts on an annual basis and the Central Bank attributed the rise in the index to an increased demand for apartments. It notes that households appear to have a preference for apartments as their first home due to the government’s interest rate subsidy scheme and the increased cost of renting.
The Central Bank acknowledges that increased cost of construction materials affects all sectors of construction activity and contributes to the increase of prices.
Price of houses
On a quarterly basis, while house prices in Nicosia and Limassol fell by 0.3%, they rose in Larnaca, Paphos and Famagusta by 2.1%, 1.5% and 0.7% respectively.
On an annual basis, house prices in Nicosia and Famagusta fell by 1.2% and 0.7% respectively, while hose prices in Limassol and Larnaca rose by 2.9% and by 1% in Paphos.
Price of apartments
On a quarterly basis, prices rose in all districts with the exception of Famagusta, where they fell by 0.2%. Prices in Paphos rose by 1.7%, followed by Limassol (0.8%) and Nicosia and Larnaca, where they rose by 0.7%.
On an annual basis, apartment prices rose in all districts. Prices in Larnaca rose by 5.5%, followed by Famagusta (4.9%). Meanwhile, prices in Limassol, Paphos and Nicosia rose by 3.9%, 3.6% and 2.4% respectively.
The Central Bank reports that the rise in residential property prices is mainly attributable to increased domestic demand. Demand from foreign buyers is stabilising and, according to unofficial estimates, demand is for lower valued property compared to previous years resulting from the cancellation of the ‘Cyprus Golden Passport scheme‘.