According to a study on the dynamics of prices for houses and apartments, which was conducted by the Central Bank of Cyprus, the coronavirus pandemic has differently affected the real estate market in different regions of the country.
The growth in house prices has slowed down in general - property in Cyprus increased in value by only 0.8% in the fourth quarter of 2020 compared to the same period last year. At the same time, the cost of apartments increased by 2.7%, while prices of houses fell by 0.1%.
If you look at the cities of the island, then housing prices have risen the most in Larnaca over the year, while Paphos real estate has fallen in price, and other provinces of the island didn't feel any change.
By the way, the dynamics of housing prices in the cities of Cyprus is as follows:
- Nicosia saw an overall rise in property prices of 0.6%. At the same time, house prices fell by 0.3%, costs of apartments increased by 2.5%
- Limassol has an overall rise in property prices of 1%. There was a stabilization of prices for houses, apartments rose in price by 3.5%.
- Larnaca - an overall rise in property prices of 1.8% was recorded here. Prices for houses increased by 0.7%, and costs of apartments increased by 5.6%.
- Paphos has a drop in property prices of 0.6%. At the same time, prices for houses decreased by 0.8%, and costs of apartments decreased by 0.9%.
- Famagusta has property prices stabilized. At the same time, prices for houses increased by 1.1%, and costs of apartments increased by 0.6%.
According to experts from the Central Bank, "the rise in apartment prices in Larnaca may be caused by the demand of foreign investors thanks to the program for obtaining a permanent residence permit in Cyprus."
It is worth noting that according to the same study, the era of increased demand for homes by Cypriots is a thing of the past. Today most of the locals prefer to buy apartments.
There are 3 groups, each of which for different reasons buys apartments that are smaller in size and cheaper than houses:
- The first group are people who, due to low interest rates on deposits, buy real estate as an investment.
- The second group are people who buy apartments for subsequent rental.
- The third group are young couples or families who, due to their low income, buy apartments as their first home, because apartments are more affordable.
It is worth noting that government subsidies on mortgage interest rates have contributed significantly to the recovery in demand from Cypriot buyers for real estate. To some extent, this offset the decline in foreign buyer interest, which is mainly due to the coronavirus pandemic.