CYPRUS: House prices up 2.3% in Q1, Larnaca sees biggest gains

The property prices recorded increases on an annual basis in all cities and asset classes, with significant increases recorded in Limassol, Nicosia and Larnaca, whilst Paphos and Paralimni have shown smaller annual increases, a RICS survey has shown.

Residential prices for both houses and apartments increased by 2.3% and 1.3%, respectively, in the first quarter of the year, compared to the previous quarter, with the biggest increase being in Larnaca – 4.6% for apartments and 2.8% for houses, according to the latest RICS’ Cyprus Property Price Index.

Values for holiday homes increased by 1.7% for apartments and 1.3% for houses, quarter on quarter. Limassol showed the highest quarterly increases for holiday apartments with an increase of 2.9% and Paralimni for holiday homes with an increase of 2.1%.

Across Cyprus, on an annual basis (compared to Q1 2016), apartments increased by 4.9%, houses by 3.3%, offices by 2.8%, warehouses by 2.6% and retail by 4.4%.

The RICS report said that during the first quarter of 2017 the Cyprus economy showed further signs of stability, with a seasonally adjusted quarterly GDP growth of 0.6% and an annual seasonally adjusted GDP growth of 3.3%. Unemployment remained at relatively high levels, on a downtrend to 12.8% (from the high levels of 17%). Given prevailing economic conditions and the marginally improved confidence in the banking system, there were relatively higher transactions during the first quarter. Financial institutions, despite their portfolios being dominated by nearly 50% in non-performing loans (NPLs), have been more willing to provide access to finance and there is a growing interest from locals.

On a quarterly basis rental values increased by 2.5% for apartments, 2.6% for houses, 1.6% for retail, 4.6% for offices, while for warehouses they remained stable. Compared to Q1 2016, rents increased by 5.5% for apartments, 9.6% for houses, 6.3% for retail, 3.1% for offices and for warehouses 11%. All asset classes have shown a consecutive quarterly growth.

In Q1 2017, average gross yields stood at 4% for apartments, 2.1% for houses, 5.4% for retail, 4.3% for warehouses, and 4.8% for offices.