23.09.2023
The upward trajectory of property prices in Cyprus in recent years, driven in part by rising costs of building materials and increased demand, has raised concerns among experts including Marinos Kineiro , President of the Real Estate Agents Registration Council.
“Recently, we have noticed that many property owners, development entrepreneurs and even individuals are seeking unnaturally high sales and rental prices for their properties,” Quineiro said .
Drawing on many years of experience in the Cypriot property market, he added that “we can determine when prices are within reasonable limits and when they deviate from the norm. Currently, prices do not correspond to the traditional and logical parameters of the Cypriot real estate market,” he explained.
Recent data from the Central Bank of Cyprus (CBC), especially for the first quarter of 2023, confirms Kineyiru’s observations .
The house price index shows an increase of 7.7 percent compared to the same period the previous year. Notably, home prices rose 6.6 percent year-on-year, while apartment prices rose 8.4 percent. This increase is significant considering that, for example, an apartment costing €150,000 in the first quarter of 2022 is now selling for around €163,000, while a house worth €250,000 now costs around €265,000. For example, in Limassol , where prices were most extreme, property sales reached almost €500 million in the second quarter of 2023, with most buyer interest in apartments priced between €100,000 and €500,000.
During this time, 1,383 properties were sold for a total of 437.9 million euros. Limassol remains the leader in the Cyprus real estate market, with apartments costing between 100,000 and 500,000 euros being especially popular.
During the second quarter of 2023, 553 apartments, 184 houses, 312 land plots and 218 land plots were sold in the capital.
The cost of sold apartments reached 99.7 million euros, houses – 46.5 million euros, land – 20.2 million euros, land plots – 38.6 million euros.
Nicosia accounted for 29.5% of apartment sales throughout the country. Moreover, according to a recently published report, buyers in Nicosia are showing strong interest in apartments priced between €100,000 and €200,000, with almost six out of ten apartments sold falling in this price range.
In addition, four apartments worth more than €1 million were sold in the Cypriot capital.
More than half of house sales in the Nicosia area (99 out of 184) were in the price range of €100,000 to €300,000. Two houses were sold for prices exceeding 1 million euros.
This trend is concerning, especially as households face financial constraints in the real estate market, exacerbated by rising interest rates.
At the same time, headline inflation continues to erode the incomes of rental households, creating serious problems for renters.
Kineyiro also highlighted the role of real estate agents, who are often at the center of negotiations between buyers, sellers and tenants. “Many colleagues have been the subject of critical comments from potential buyers and tenants in recent months. It is important for people to understand that real estate agents do not determine the sale or rental prices of properties,” he added.
Concluding his analysis, Kineyiru stressed that although estate agents do not set property prices, excessive price increases are a serious issue that cannot be ignored as they can have detrimental effects on the entire sector and the economy as a whole.
He said the Real Estate Agents Registration Board “is committed to increasing efforts to increase awareness of roles and responsibilities in the real estate market while addressing these market dynamics.”
