The General House Price Index (covering both houses and apartments) from the Central Bank of Cyprus (CBC) showed a slower annual increase during the third quarter of 2024. The Apartment Price Index slowed down more significantly than the House Price Index.
The House Price Index recorded a quarterly increase of 0.9%, lower than the 1.6% rise in the second quarter. On an annual basis, house prices increased by 6.5%, compared to 8% in the previous quarter.
Apartment prices showed the biggest slowdown, rising by 8.8% annually, compared to 12% in the last quarter. House prices also slowed slightly, increasing by 6% compared to 6.2% previously.
Local Buyers driving demand
Demand from local buyers increased, while purchases by foreign investors dropped slightly. The total number of sales contracts reached 4,081, marking an annual increase of 6.6%. Transactions by local buyers rose by 13.7%, while foreign purchases fell by 2.3%.
Most property transactions took place in Limassol, followed by Larnaca, Nicosia, Paphos, and Famagusta. Paphos remains the most popular location for foreign buyers, while local buyers dominate in other districts.
District variations in house prices
Property prices showed different trends across districts. On a quarterly basis, house prices rose by:
- 1% in Nicosia
- 3% in Famagusta
- 9% in Limassol
- 1% in Larnaca
- 2% in Paphos
Annually, the highest increases were in Paphos (11.8%) and Famagusta (11.1%), while price growth was lower in Limassol (7.4%), Larnaca (8.1%), and Nicosia (2.7%).
For apartments, the highest annual price increases were in:
- Famagusta (19.2%)
- Larnaca (15.1%)
- Paphos (14.4%)
Price growth was slower in Nicosia and Limassol
These differences reflect local supply and demand conditions. Limassol and Nicosia have more new properties available, while Larnaca and Paphos have a tighter supply, pushing prices up. In Famagusta, limited supply and new developments have also driven price increases.
Factors affecting the market
Several market trends are influencing property prices:
- More new properties: The number of residential units approved for construction rose by 4% in the first half of 2024 compared to the same period in 2023.
- Construction costs: Prices of building materials dropped slightly by 2% year-on-year.
- Mortgage rates: Housing loan interest rates stood at 59% in the third quarter, slightly higher than in the previous quarter.
- Loans: New mortgage lending rose by 5%, reaching €270 million, though banks are keeping strict lending criteria.
Outlook for the property market
The slowdown in price increases is expected to continue in the coming months. More properties are becoming available, and demand from foreign buyers has weakened, helping to stabilise prices.
According to European Commission research, expectations for future property price growth are lower than in 2023. Buyers and investors appear more cautious, suggesting the market is moving towards a period of stability. Prices will likely continue to rise but at a slower pace, as supply increases and demand moderates.
