In Cyprus, annual residential property prices continued to rise by 1.2% in the third quarter of 2021, mainly due to the purchase of apartments.
This is evidenced by the residential property price index of the Central Bank of Cyprus (CBC). The index recorded quarterly growth of 0.5% compared to 0.3% in the second quarter of 2021. On an annualized basis, it registered a 1.2% growth compared to 0.3% in the same quarter of 2020.
House prices in the 3rd quarter declined on many fronts, both quarterly and year-on-year, despite rising apartment prices.
House prices have been declining by 0.3% annually, and quarterly they recorded a slight increase of 0.3%, mainly due to sales in Larnaca and Paphos. On the contrary, apartment prices rose by 1% per quarter and by 4.5% per year. Apartment prices rose quarterly in all areas except Famagusta, where they fell by 0.2%. They increased by 0.7% in Nicosia, Limassol by 0.8%, Larnaca by 0.7% and Paphos by 1.7%. On an annualized basis, apartment prices rose in all districts.
According to the CBC analysis: “Households appear to be favoring apartments as their primary residence due to new market realities and, in particular, government subsidization of mortgage interest rates and rising rental prices.”
“The rising cost of building materials continues to drive up the price level as it now affects all sectors of the construction industry.”
The continued rise in housing prices is mainly due to domestic demand. “External demand is stabilizing, although it remains low and concerns cheaper real estate.
“Demand from foreign investors may be related to the state’s promotion of international headquarters for high-tech companies, in terms of investors wishing to move their headquarters to Cyprus, and permanent residence programs,” the CBC said in a statement.