03.10.2022
An acceleration in house price growth was recorded in the second quarter of 2022, mainly due to rising construction costs, according to the Central Bank of Cyprus Quarterly Report on Residential Property Price Indices in Cyprus, prepared by the Central Bank of Cyprus. Cyprus Real Estate Unit (REU).
The House Price Index (CPI) of the Central Bank of Cyprus (CBC) for houses and apartments showed an increase in the second quarter of 2022, recording a quarterly increase of 1.7% compared to 1.1% in the previous quarter, while in the annual In terms of figures, the figure rose by 4.7% compared with 3.2% in the previous quarter.
According to the Central Bank, the accelerating growth in housing prices is mainly due to an increase in construction costs, which is reflected in higher prices for both apartments and houses.
While apartment prices are rising more year-on-year than houses in all areas, the CBC notes that house prices are currently on the rise as well.
“For the first time since the start of the pandemic, all areas are seeing an annual increase in prices for both apartments and houses, indicating an upward trend in prices across the spectrum of the housing market,” the report says.
Demand in the real estate market in the second quarter of 2022 recorded an upward trend both domestically and from abroad, while supply showed signs of declining. The war in Ukraine has increased inflationary pressures, which have significantly affected the cost of construction, but at the moment this does not seem to have had a negative impact on demand.
The central bank adds that over the medium term, rising borrowing costs due to rising interest rates, as well as shrinking revenues due to inflationary pressures, are expected to dampen demand, but without necessarily lowering prices, which are currently on an upward trend for construction cost account.
