The Residential Property Price Index recorded a recovery in the first quarter of 2021 after two consecutive quarters of falling prices, according to the RPPI compiled by the Cyprus Central Bank (CBC).
The rise was mainly due to an increase in apartment prices.
The property index (houses and apartments) recorded a quarterly increase of 0.5% compared to a decrease of 0.2% in Q4 2020; on an annual basis, it recorded a 0.9% increase from 0.8% in the previous quarter.
According to the CBC, the rise is mainly due to the 1.2% increase in apartment prices compared to the previous quarter.
House prices rose marginally by 0.2% over the same period.
House prices increased by 0.2% quarterly, while apartment prices increased by 1.2%.
Annually, house prices increased marginally by 0.2%, while apartment prices increased by 2.5% compared to Q1 2020.
According to the CBC, the increase in prices per type of housing seems to reflect the enhanced preference of buyers and investors for apartments in relation to homes in most districts.
However, in Limassol and Larnaca, there seems to be more demand for smaller houses.
“According to real estate market professionals, in most districts, there is an increased demand from domestic buyers, mainly for apartments and houses of smaller size and value than in the past,” the bank report said
It may be because buyers wish to benefit from the state scheme that subsidizes interest rate for first-time buyers or buyers looking to purchase holiday homes or investors buying to let.
On the other hand, the CBC notes there is a reduced interest in luxury real estate in coastal areas due to the abolition of the Cyprus Investment Program.
In Q1 2021, the RPPI increased in Limassol, Larnaca and Famagusta quarterly, but house prices fell in Paphos and remained stable in Nicosia.