On Wednesday 15th May, the Central Bank of Cyprus published the Residential Property Price Index (HRC) for the fourth quarter of 2023.
According to the fresh data, housing costs in the island nation rose on both a quarterly and annual basis.
Specifically, the increase was 2.3 per cent, up from 2.2 per cent in the previous quarter. At the same time, on an annualised basis, HRC rose by 8.3 per cent, compared with 7.6 per cent in the corresponding quarter of 2022. It is worth noting that this development affected both flats and houses in Cyprus.
Flat prices rose by 3.2% compared to the first quarter. And house prices rose by 1.8%, continuing the trend of the previous quarter. On a year-on-year basis, flat prices rose by 12.7 per cent in the quarter under review, while house prices increased by 5.7 per cent.
The Central Bank of Cyprus emphasised that "the acceleration of house price growth in the country is mainly due to an increase in demand and a decrease in supply in the market, which is reflected in the increase in the cost of both flats and houses".
Recall that the Cyprus House Price Index (HPI) is a quarterly index that measures the change in average residential property prices. It covers all types of residential property, both new and second hand. The source of the data used to compile the indices is the Land and Surveys Department of the Ministry of the Interior. The data cover all areas under the control of the Government of the Republic of Cyprus.
It is worth noting that in the fourth quarter of 2002 house prices rose in all cities in Cyprus.
In particular, the increase was 1.5 per cent in Nicosia, 3 per cent in Limassol, 2.5 per cent in Larnaca, 2.7 per cent in Paphos and 2.1 per cent in the free areas of Famagusta.
On an annual basis, the house price index rose by 5.1 per cent in Nicosia, 10.7 per cent in Limassol, 11 per cent in Larnaca, 8.3 per cent in Paphos and 9.5 per cent in the free areas of Famagusta.
On a quarterly basis, house prices rose in all Cypriot cities: Nicosia (+1.5%), Limassol (+2.5%), Larnaca (+1.2%), Paphos (+1.7%) and the free areas of Famagusta (+1.4%). On a yearly basis, house prices also rose across the island.
Quarterly, house prices rose by 5% in Nicosia, 6.5% in Limassol, 7.7% in Larnaca, 2.6% in Paphos and 10.9% in the free areas of Famagusta.
The population of Cyprus has doubled in recent years. This can be seen by the very heavy traffic on the roads, especially at rush hour. Buying an apartment is much more profitable than renting. And this affects the demand, which is increasing. Every day, large companies continue to relocate their employees. The most popular city for relocation is Limassol, where we see the biggest increase. The price of building materials has also increased, especially minerals and electromechanical products. The increase in the cost of building materials also affects the mortgage loans of individuals and legal entities, you have to pay more, - commented on the situation in the housing market of Cyprus Maxim Arte, broker of DOM office in Limassol.