According to the Central Bank of Cyprus in 2023 - a significant decline in the issuance of new loans for the purchase of housing (about 20% year-on-year) was reported.
The volume of mortgage loans from January to September 2023 amounted to 746.2 million while in the corresponding period of 2022 - 932.4 million euros. At the same time, real estate prices continue to grow.
According to the Central Bank, the decline in demand for new mortgages was expected due to the European regulator's single restrictive monetary policy, which led to increased interest rates.
The Central Bank also noted that the average rate on home loans was 4.4% in the third quarter of 2023, compared to 4.3% in the second quarter of 2023 and 2.7% in the corresponding period of 2022.
In addition, according to the latest Central Bank survey, financing criteria have tightened compared to the previous quarter, while the same survey confirms the continuous decline in demand for credit.
The Central Bank emphasized that the developments mentioned above do not seem to have a significant negative impact on overall real estate demand in 2023.
Property prices will continue their upward trend, mainly as a result of increased demand for real estate from both local and foreign buyers.
By the way, domestic demand remains relatively high, while foreigners' interest is increasing.
As a reminder, according to the Statistical Service, the house price index for the third quarter of 2023 was at 110.65 units, recording a year-on-year increase of 0.6%.