Housing Prices Keep Climbing

The Central Bank of Cyprus reported on Tuesday that housing prices continued their upward trend in the fourth quarter of 2023, primarily driven by increases in apartment prices.

Despite a slight decrease in demand, housing prices kept rising, as indicated by comparative sales data from the department of lands and surveys.

The demand for new housing loans was significantly impacted by an increase in mortgage interest rates. Additionally, demand from foreign buyers and stable construction material prices led to more moderate short-term increases in the Housing Price Index (HPI).

The department of lands and surveys noted that the total number of sale deeds submitted to district offices for all types of properties showed a slowing increase on an annual basis during the fourth quarter of 2023.

Overall property demand rose due to domestic buyers, while foreign buyer transactions decreased.

In 2023, the total value and number of residential property transactions, including houses and apartments, slightly fell compared to 2022. This was influenced by rising mortgage interest rates and fewer new housing loan approvals.

Demand for apartments surpassed that for houses, reflecting a preference for smaller properties, as seen in reduced square footage per residential unit with building permits.

Limited supply compared to high demand contributed to the increase in the Housing Price Index (HPI).

The number of residential building permits issued in 2023, along with ongoing construction projects, is expected to boost the supply of residential properties in the medium term, potentially easing price pressures.

In the fourth quarter of 2023, the Housing Price Index (HPI) rose by 2.3%, similar to the previous quarter’s 2.2% increase in rents. This slight HPI rise included a 1.8% increase in house prices and a 3.2% increase in apartment prices.

Annually, housing prices increased by 8.3% in the fourth quarter of 2023, up from 7.6% in the previous quarter, with apartment prices rising by 12.7% and house prices by 5.7%.

All provinces saw quarterly housing price increases for the fourth consecutive quarter in 2023: Nicosia (1.5%), Limassol (3%), Larnaca (2.5%), Paphos (2.7%), and Famagusta (2.1%).

Annual changes in Property Price Indices (PPI) showed increases in every province: Nicosia rose by 5.1%, Limassol by 10.7%, Larnaca by 11%, Paphos by 8.3%, and Famagusta by 9.5%.

Quarterly house prices also increased across all provinces, with Nicosia up by 1.5%, Limassol by 2.5%, Larnaca by 1.2%, Paphos by 1.7%, and Famagusta by 1.4%.

Source: Cyprus Property News

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