The construction landscape in Cyprus is undergoing a transformative shift, propelled by a surge in demand for apartments from both local and international buyers. Developers are adapting to this evolving trend, with key insights shared by Stelios Gavriel, Secretary of the Federation of Cyprus Building Contractors Associations.
The traditional preference for standalone houses is giving way to a growing inclination toward apartments. Nicosia, in particular, is witnessing a significant demand, reflecting a departure from conventional Cypriot housing choices. This shift is attributed to factors such as rising construction costs and increased interest rates.
Developers anticipate that the trend favouring apartments will gain momentum in 2024, aligning with insights from surveys released by the Statistical Service Cystat. Despite a 6.9% reduction in building permits issued, the total value and area covered by permits, along with the number of residential units planned, have witnessed growth.
Housing prices, both quarterly and annually, have shown an increase across all districts, with Limassol and Larnaca experiencing higher spikes. This surge is linked to foreign buyers’ interest, especially within the headquartering policy framework.
While housing loans have seen a 20% annual decrease, the upward trend in property prices continues. The Central Bank’s introduction of a unified restrictive monetary policy has led to increased interest rates, impacting borrowing costs. To address affordability concerns, the Council of Ministers has approved new construction incentives to stimulate the development of approximately 800 affordable residential units.
The current dynamics in Cyprus’s construction and real estate sectors underscore a noteworthy transition in housing preferences. The demand for apartments is reshaping the market, prompting developers to adapt and policymakers to introduce initiatives to promote affordability and sustainability.
Source: Cyprus Property News