According to the Central Bank of Cyprus (CBC), residential property price growth slowed in the third quarter of 2024. The apartment price index showed a more significant slowdown compared to the house price index.
The house price index increased 0.9% quarter-on-quarter, slower than the 1.6% increase in the second quarter. On an annualized basis, house prices rose 6.5%, down from 8% in the previous quarter. Apartment prices showed the biggest slowdown, rising 8.8% annually, well below the previous 12%.
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Demand from local buyers
While foreign investors’ activity slightly declined, demand from local buyers increased. The total number of registered transactions was 4,081, up 6.6% from a year earlier. The number of transactions involving local buyers increased by 13.7%, while foreign purchases fell by 2.3%.
The highest number of property transactions were recorded in Limassol, with lower figures recorded in Larnaca, Nicosia, Paphos and Famagusta. Paphos remains the most popular area for foreign buyers, while local buyers dominate sales in other areas.
Analysis of price dynamics by districts
Property prices in different areas of Cyprus show different trends. On a quarterly basis, house prices increased as follows: Nicosia – 1%; Famagusta – 3%; Limassol – 9%; Larnaca – 1%; Paphos – 2%.
On a year-on-year basis, the largest increases in house prices were seen in Paphos (11.8%) and Famagusta (11.1%). In Limassol, Larnaca and Nicosia, increases were more moderate – 7.4%, 8.1% and 2.7% respectively.
For apartments, the highest price increases over the year were recorded in:
- Famagusta: 19.2%;
- Larnaca: 15.1%;
- Paphos: 14.4%;
In Nicosia and Limassol, the rate of price growth for apartments was lower. These differences are explained by local conditions of supply and demand. Limassol and Nicosia have more new properties, while in Larnaca and Paphos, limited supply is driving up prices. In Famagusta, prices are rising due to limited supply and new developments.
Factors influencing the market
The residential real estate market is influenced by a number of factors:
- More new properties: The number of residential properties approved increased by 4% in the first half of 2024 compared to the same period in 2023.
- Construction Costs : Construction material prices fell 2% year-on-year.
- Mortgage Rates : Interest rates on home loans were 5.9% in the third quarter, slightly higher than the previous quarter.
- Loans : New mortgages rose 5% to €270 million, although banks continue to adhere to strict lending criteria.
Cyprus Property Market Outlook
The slowdown in price growth is expected to continue in the coming months, with an increase in the number of available properties and weaker demand from foreign buyers helping to stabilise prices.
According to research by the European Commission, expectations for future property price growth are lower than in 2023. Buyers and investors are becoming more cautious, indicating that the market is moving towards a period of stability. Prices are likely to continue to rise, but at a more moderate pace, as supply increases and demand levels out.
