7 headlines on the Cyprus property market

December 12, 2023
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Property markets in the UK and much of Europe are stagnant or in decline right now, but not so in Cyprus. Recent data show that both prices and rental values on Aphrodite’s Isle were on the up in the first half of the year, with the number of homes being sold rising too.

 

Unsurprisingly, foreign buyers are driving activity. For anyone in the market for a home there, we’ve picked out some useful headline stats for you…

 

1. Hearty appetite for Cyprus homes

The demand for Cyprus homes is significantly stronger than last year. In the first seven months of 2023, there were 21% more property purchases across the island compared to 2022. According to Cyprus’s Department of Land and Surveys (DLS), between January and July (inclusive) 9,051 sales contracts were registered on the island, while in 2022 this figure was 7,481.

 

2. Prices are on an upward trend

Buyers are needing to dig deeper to bag themselves a property on this sunny Mediterranean island. If you bought last year or pre-pandemic, permission to wear a smug smile on your face. Prices across all types of residential property are riding an upward curve, which kicked in in 2021 following the Covid slowdown. Apartments are spearheading this growth, with prices for the sector increasing 12 per cent in the year between the second quarters (April-June) of 2022 and 2023. Values for houses rose nine per cent for the same period, according to the RICS/KPMG Cyprus Property Index. For apartments and houses classed specifically for holiday (tourist) use, gains were nine per cent and 8.5 per cent respectively.

 

3. Larnaca tourist properties

-Prices rises for tourist property have been strongest in Larnaca so far this year, reported the RICS/KPMG Index. The average value for holiday apartments in the district rose seven per cent between the first and second quarters of 2023. For holiday houses, this figure was 6.79 per cent. Elsewhere price growth between the two quarters was modest – typically between 0.8 and 1.65 per cent, except in Paphos where holiday houses climbed 2.7 per cent.

 

4. Rental surge

Homeowners letting their property, either to holidaymakers or residential tenants, are enjoying an uplift in rental income too. Rental values for apartments have rocketed 17.9 per cent (16.5 per cent for holiday apartments) and 13.6 per cent for houses (13.9 per cent for holiday houses) between the second quarters of 2022 and 2023, according to property data specialist Ask Wire. “The rising trend in property values and rental rates since Q2 2022 isn’t slowing down, particularly due to the increase in prices of apartments and houses in Limassol, Paphos and Larnaca,” said Pavlos Loizou, Ask Wire CEO. “However, the blend of increased rates and high prices/rents has established a stable, albeit high, market threshold. Looking forward to Q2 2023, we foresee residential property prices remaining fairly steady, despite potentially slower demand and reduced transaction volume.”

5. Holiday apartments, the best investment?

Holiday apartments are the best performers in terms of rental yields, followed by the generic apartments. Yields for these two sectors were 5.7 per cent and 5.4 per cent respectively in the second quarter of 2023, reported the RICS/KPMG Index, representing year-on-year rises of 0.6 per cent and 0.45 per cent respectively. Yields for holiday houses in the quarter were 2.7 per cent (2.66 per cent in 2022) and for generic houses 2.9 per cent (2.75 per cent).

 

6. Up-and-coming Larnaca

Larnaca is emerging as the new hot spot for investment and future developments. Projects waiting to commence or underway include regeneration of the parts of the old town, the €1.2billion redevelopment of the town’s marina and port – due to commence in 2024, and plans for upscale tourist projects on the site of former fuel and gas storage tanks in the Dhekelia seafront area.

 

7. Popular Limassol

More properties are being sold in Limassol than anywhere else, with the DLS registering 3,105 sales contracts in the district during the first seven months of 2023. This represents an increase of 21 per cent compared to the same period in 2022. Larnaca and Paphos recorded impressive year-on-year jumps of 32 per cent and 31 per cent respectively for the same period. The former attracted 1,777 registered contracts for the period, the latter 2,062. The easternmost district Famagusta had 431 sales, a 17 per cent hike since 2022.


By Richard Way

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