27.05.2022
The real estate market, which is still recovering from the pandemic, has remained on a continuous upward trajectory in the first quarter of 2022.
Although the real estate market registered a positive sign (31% annual increase in registered transactions and 52% increase in contracts), however, the cancellation of the investment program played a key role in reducing documents for sale to foreigners (-14% on an annual basis).
According to the recent release of RICS Cyprus Property Price Index with KPMG Cyprus, rising inflation and rising construction costs are expected to impact prices and possibly transaction volume in the coming quarters.
Larnaca dominates
It is worth noting that in the first quarter of 2022, Larnaca was in the spotlight, recording the biggest growth in the overall market for both holiday homes and apartment, house and office categories.
Average prices for houses and holiday homes in Larnaca increased by more than 5% compared to the previous quarter, while apartments increased by 5%.
Prices for houses and apartments in Limassol rose by about 3%, while the growth rate was lower in commercial buildings, offices and holiday homes.
On the other hand, small reductions were observed in various property categories throughout Cyprus.
In Nicosia, apartment prices rose by more than 1%, while house prices fell by almost 1%.
Prices are rising in Cyprus
On an annualized basis (Q1 2022 compared to Q1 2021), average prices for apartments in Cyprus increased by 2.75%, houses by 1.86%, commercial property by 0.96%, warehouses by 1.81% , office space by 0.89%, while for holiday apartments and houses the growth reaches 0.43% and 1.95%. In general, prices for holiday homes in Cyprus increased by almost 6%. In contrast, prices for holiday apartments decreased by 1.18%.
High rent
Rental prices increased in the first quarter of 2022 compared to the previous quarter for both apartments (3.66%) and houses (2.91%), apartments, holiday apartments (3.65%) and country houses ( 2.06%).
The lowest rent growth was recorded in warehouses (0.51%), commercial real estate (0.78%) and offices (0.51%).
Yield
The average gross return in the first quarter of 2022 showed a slight increase compared to last year, with retail (5.71%) still the highest return and home (2.62%) the lowest.
5% concerns the profitability of apartments and warehouses, and above 5% the profitability of offices and country apartments.
