Residential property prices in Cyprus rose at their slowest pace in the last ten quarters during the final quarter of 2024, according to the Cyprus Central Bank’s (CCB) latest report on the housing market published earlier today.
In its Residential Property Price Index for the fourth quarter of 2024, the CCB notes that the slowdown in price growth is likely to continue in the short term, attributing it to increased housing supply and a slowdown in foreign demand for real estate.
“A potential stabilisation in construction material costs is also expected to help curb future increases in residential property prices,” the report adds.
Lowest growth rate since 2022
The House Price Index, which covers both apartments and houses, rose by just 0.4% in Q4 2024, compared with a 0.9% increase in the third quarter.
On an annual basis, prices were up 4.5%, down from 6.5% in Q3, marking the lowest year-on-year increase since Q2 2022.
The pace of slowdown varied between apartments and houses. Apartment prices increased by 5.5% year-on-year (down from 8.8% in Q3), while house prices grew 4.6% (from 6.0%).
On a quarterly basis, apartment prices rose just 0.1%, while house prices climbed 0.5%.
Regional breakdown: Paphos the exception
Among Cyprus’ districts, only Paphos experienced an acceleration in housing prices, while elsewhere, growth slowed:
- Nicosia: 0.7%
- Limassol: 4.4%
- Larnaca: 6.5%
- Paphos: 13.4%
- Famagusta: 9.2%
House prices in Paphos rose by 14.7%, while in Limassol and Famagusta, growth moderated to 5.1% and 7.8%, respectively. Nicosia even recorded a slight decline of 0.4%, while Larnaca remained stable at 6.1%.
Apartment prices slowed across the board, with annual increases of:
- Nicosia: 2.6%
- Limassol: 5.5%
- Larnaca: 8.7%
- Paphos: 12.1%
- Famagusta: 14.2%
Demand for housing remains resilient
Data from the Department of Lands and Surveys show that the number of property sale contracts rose by 2.8% year-on-year in Q4, reaching 4,163.
The increase was supported by both domestic and foreign buyers, with local transactions up 3.2% and foreign ones up 2.2%.
Limassol led with 1,341 transactions, followed by:
- Nicosia: 934
- Larnaca: 859
- Paphos: 825
- Famagusta: 204
In Paphos, 67% of buyers were foreign—unlike other districts, where Cypriot buyers prevailed.
Lending activity and interest rates
New housing loans increased by 7.6% year-on-year, rising to €290.1 million from €269.6 million in Q4 2023, according to the CBC’s Monetary and Financial Statistics.
Despite a drop in the average mortgage rate to 4.62% (from 5.04% a year earlier), interest rates remain above their five-year average.
The CCB’s January 2025 Bank Lending Survey indicates that lending criteria remain stable and demand for housing loans unchanged.
Housing supply on the rise
The supply of residential units also grew significantly, with a 10% increase in building permits between January and September 2024. A total of 8,801 units were approved, up from 7,999 in the same period of 2023.
This rise reflects the market’s response to previous demand and stems from two key factors:
- The transfer of licensing responsibilities to District Local Authorities in June 2024.
- A surge in apartment block permits.
Larnaca and Limassol recorded the highest increases in building permits, suggesting a further boost in supply in the near future.
Market sentiment and construction costs
According to the European Commission’s Economic Sentiment Surveys, expectations for property price increases dropped sharply to 25.4 in December 2024, from 68 a year earlier, signalling more modest market outlooks.
Meanwhile, the Cyprus Statistical Service reported that construction material prices edged up only 0.2% year-on-year in Q4, showing signs of stabilisation. However, the index remains historically high due to external pressures such as geopolitical tensions and global supply chain disruptions.
