Flats push up property prices

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In Cyprus, annual residential property prices continued to rise 1.2% in the third quarter of 2021, primarily driven by apartment purchases.

This is according to the Central Bank of Cyprus (CBC) Residential Property Price Index.

The Index recorded a quarterly increase of 0.5% compared to 0.3% in Q2 2021.

On an annual basis, it registered an increase of 1.2% compared to 0.3% in the same quarter of 2020.

House prices in Q3 decreased in many areas, both quarterly and annual, despite increases in apartment prices.

House prices decreased annually by 0.3%, while quarterly, they recorded a small increase of 0.3%, mainly due to sales in Larnaca and Paphos.

On the contrary, apartment prices increased by 1% quarterly and 4.5% annually.

According to CBC analysis: “Households seem to prefer apartments as their main residency due to the new realities in the market and specifically due to the subsidisation of the interest rate for mortgages by the government and the increase in rental prices.”

“The increase in the cost of construction materials continues to contribute to increasing the price level since it is now apparent in all sectors of the construction activity.”

According to real estate market experts, the demand for property by foreign investors is stable.

It concerns the real estate of lower value than previous years due to the termination of Cyprus’ citizenship by investment program.

During Q3 2021, residence prices increased quarterly in all districts except Nicosia, which remained stable.

An increase of 0.1% was recorded in Limassol, a 1.7% increase in Larnaca, a 1.6% rise in Paphos and 0.6% in Famagusta.

On an annual basis, residential prices increased in Limassol, Larnaca and Paphos but decreased in the other districts.

In Limassol, house prices increased by 2.9%, in Larnaca, they rose 2.9% and in Paphos by 1%.

On the contrary, in Nicosia and Famagusta, prices continued their downward trend, showing a decrease of 1.2% and 0.7% respectively annually.

Quarterly, house prices recorded increases in all districts except Nicosia and Limassol.

In Larnaca, Paphos and Famagusta, the prices increased by 2.1%, 1.5% and 0.7%, respectively.

Contrary, both in Nicosia and Limassol, house prices fell by 0.3%.

On an annual basis, house prices fell in all districts except Limassol and Larnaca, where they rose by 2% and 2.1%, respectively.

Conversely, house prices in Nicosia decreased by 3%, in Paphos by 0.2% and in Famagusta by 2.6%.

Apartment prices increased in all districts quarterly except Famagusta, which decreased by 0.2%.

They increased by 0.7% in Nicosia, Limassol by 0.8%, Larnaca by 0.7%, and Paphos 1.7%.

On an annual basis, apartment prices increased in all districts.

In Nicosia, the prices increased by 2.4%, Limassol by 3.9%, Larnaca by 5.5%, Paphos by 3.6%, and Famagusta by 4.9%.

The continuing increase in residence prices is mainly due to domestic demand.

“External demand stabilises, although it remains low and concerns lower value real estate.

“The demand from foreign investors may be due to the promotion by the state of international headquartering for high-tech companies, which concerns investors who wish to move their headquarters to Cyprus, and the permanent residency program,” said CBC.