Cypriots are increasingly using cash rather than loans to buy property, according to the Central Bank of Cyprus.
According to the island nation's main financial institution, locals are reluctant to overpay for housing against the backdrop of high mortgage rates. This is borne out by data for the first four months of 2024. In particular, despite the surge in property sales in Cyprus during this period, the volume of new housing loans fell by 7.4 per cent compared to January-April last year. The Central Bank of Cyprus is confident that the main reason for the decline in mortgage lending is the rise in interest rates.
This indicates a growing preference for cash transactions in the property market, - said a Central Bank spokesman.
It is worth noting that property sales in Cyprus rose by 4.1 per cent in the first four months of this year compared to the same period last year, driven by demand not only from foreign buyers but also from Cypriots.
The Central Bank also noted a surge in consumer loans, especially for electric vehicles, reflecting households' increased need for credit amid rising prices and a shift towards greener transport options.
Although new housing loans have stabilised since mid-2012, banks are offering long-term fixed-rate loans to provide greater stability for borrowers.