Property Prices Stable in Cyprus, Rental Prices Fall

Цены на покупку недвижимости на Кипре стабильны, а аренда жилья падает в цене
29 June 2021 Liza Medvetskaya

According to the WiRE consulting, prices for the purchase and rent of housing in the first quarter of 2021 in Cyprus decreased for most categories of real estate.

At the same time, the largest drop in prices was recorded in Paphos (-2.6% - for retail premises, -1.7% - for warehouses, -1.5% - for offices, -3.2% - for summer apartments and - 2.5% - for summer houses).

In turn, the largest drop in office rents was demonstrated by Limassol (-11.1%). In turn, prices for summer apartments in the city fell by 1.8%.

But Nicosia became the only city on the island where there was an increase in real estate prices (+ 1.2% - for houses, + 1.3% - for retail stores and + 2.3% - for offices).

If you look at the big picture: apartment prices in the first quarter of 2021 remained at the level of the fourth quarter of 2020, while the cost of houses increased by 0.4%.

Retail stores and warehouse prices declined by 0.7% and 0.8%, respectively, while office prices rose by 0.3%.

Compared to the first quarter of 2020, prices for retail sotres fell by 5.3%, for warehouses - by 4.5%, office premises - by 1.0%, summer apartments - by 1.2% and summer houses - by 3.2%.

Quarterly rental rates for apartments fell by 0.1%, houses - by 1.4%, retail space - by 1.8%, offices - by 2.6%, summer apartments - by 0.4% and summer houses - by 2.9%. Warehouse rentals, on the contrary, increased by 0.4%.

Compared to the first quarter of 2020, rents fell by 0.6% for apartments, by 6.4% for retail space, by 3.2% for offices and by 5.4% for summer houses.

Rentals for houses, warehouses and summer apartments increased by 2.6%, 0.7% and 0.1%, respectively.

The volume of transactions in Cyprus compared to the same period last year decreased by 21%. The number of purchase and sale transactions in Nicosia increased by 8%, in Limassol - by 24%, in Larnaca - by 22%, in Famagusta - by 11%, and in Paphos - by 40%.

In total, 7,932 contracts were signed from April 2020 to March 2021: 2,186 were in Nicosia (28%), 2,491 - in Limassol (31%), 1,240 - in Larnaca (16%), 576 - in Famagusta (7%) and 1,469 - in Paphos (19%).

The total amount of mortgage loans issued to the population of Cyprus exceeded 9.4 billion euros. Of this: 93.1% were local residents, 0.4% were residents of the Eurozone and 6.5% were citizens of third countries.

Compared to the same period last year, the area of ​​objects for which construction licenses were issued decreased by 9%, and the number - by 15%.

Activity and prices in the main commercial centres of Nicosia and Limassol are currently stable, as locals are acquiring residential properties, mostly apartments, taking advantage of various government subsidies and generating income. Businesses are upgrading their office requirements, resulting in an increase in demand for Grade A office space and a contraction across lower quality premises. The other districts continue to experience low levels of demand, as they are more reliant on overseas markets and have a higher dependency on tourism. With banks flushed with liquidity, having circa €19 bln of NPLs in the economy, and government debt exceeding 100% of GDP, there is a danger of the economy sliding into ‘Japanisation’, i.e. low growth and deflation (in real terms). says Wire FS report.

In the meantime, the Pancyprian Federation of Labour (PEO) has expressed concern about the sharp increase in the cost of homes.

Owning a home in Cyprus is a pipe dream, PEO said, urging the country's government to create effective social housing programs.

By the way, construction costs have recently jumped by an average of 20%, "making buying their own home a pipe dream for many young people and low- and middle-income groups."

PEO stressed that it is vital now to implement policies and measures that effectively address these issues. In their opinion, the government and local authorities should use state and municipal lands to create "necessary social housing schemes that will offer cheap, quality housing with competitive prices based on the criteria of income of citizens of the country."

The union also said that the social housing schemes already proposed by the Cyprus Land Development Corporation (KOAG) are very few and take a very long time to implement.

The second immediate step should be to change the plans for financial assistance for the purchase and construction of housing, taking into account the increase in construction costs, - emphasized in PEO.

Finally, PEO proposed the creation of an oversight body for the implementation of housing policy, which would include relevant government departments, local authorities, trade unions and civil society organizations.

Цены на покупку недвижимости Кипра стабильны, а аренда жилья падает в цене

You can find profitable options for buying real estate in Cyprus on DOM Real Estate. The website also has a large number of rental properties, both residential and commercial real estate. Choose and contact professionals who will help you make the right choice!
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