Prices for most types of property in Cyprus are increasing according to the latest edition of the RICS Cyprus Property Price Index with KPMG.
The latest Property Price Index (for the fourth quarter of 2021) also reports that demand for property is increasing as the market continued to recover from the COVID-19 pandemic, with a 15% rise in transactions over the quarter.
The number of properties sold to non-EU citizens who registered contracts of sale at Land Registry offices increased by 20% compared to the previous quarter – and by 30% compared to the fourth quarter of 2021. The issue of non-performing loans and debt for asset swaps has decreased for most banks, although still present but at a minor scale than previous years.
On the subject of non-performing loans, last month the statistical office of the European Union (Eurostat) reported that:
“In 2020, Cyprus remained the country with the highest stock of non-performing loans (assets) of general government, at 28.3% of GDP, a far larger share compared with other EU Member States. This was due to a large transaction in 2018, whereby non-performing loans from a Cypriot public financial corporation (classified outside government) were transferred to a government unit.
“Three other EU Member States recorded a share higher than 1% of GDP: Slovenia (2.2%), Portugal (1.5%) and Croatia (1.4%). For Cyprus, Slovenia and Portugal, the majority of non-performing loans refer to loans of financial defeasance structures. In the case of Croatia, the figure mainly refers to the loans of a national development bank (classified inside general government).”
Property prices increasing
Prices for residential apartments increased by 1.47% and remained steady for houses. The largest increase in apartment prices were recorded in Paphos, up by 2.92%, and in Nicosia, up by 2.24%.
Values for holiday homes across Cyprus during the fourth quarter rose by 0.30% for apartments but fell by -0.70% for houses. The largest increase was recorded in Paphos by 1.81% for holiday apartments; the largest fall, while the largest fall in house prices, -1.5%, was recorded in Limassol.
On an annual basis, apartment prices rose by 1.47%, while house prices remained steady. Meanwhile retail, warehouse and office prices rose by 0.34%, 0.48% and 0.45% respectively.
Rental values increasing
Over the fourth quarter, most rental values rose; 0.65% for houses, 1.23% for apartments, 1.58% for offices and 1.34% for warehouses.
However, small falls were recorded in holiday homes with rental values apartments down 0.12% and house rental values falling by 0.53%.
Average gross rental yields stood at 4.9% for apartments, 2.6% for houses, 5.7% for retail, 4.5% for warehouses, and 5.2% for offices.