The Republic of Cyprus continues to witness an upward trajectory in housing prices, particularly in the apartment segment, as indicated by data released by the Central Bank of Cyprus (CBC) on Wednesday. The Residential Property Price Index (RPPI), monitored by the CBC, reflects consistent increases on both an annual and quarterly basis.
The surge in demand is attributed to a dual impact from domestic buyers, including those eyeing buy-to-let investments, and foreign investors, notably within the framework of the headquartering policy and other investment avenues.
Despite the increased demand, there has been a decrease in the number of residential building permits issued for the period from January to August 2023 compared to the same period in 2022. This trend is linked to the ongoing rise in construction and loan costs.
The RPPI, covering houses and apartments, recorded a 2.2% increase in Q3 2023, with apartments leading the rise at 3.6%. On an annual basis, there was a 7.6% increase in property prices, with apartments showing a significant 11.5% surge.
Housing prices witnessed a quarterly increase across all districts in Q3 2023. Limassol and Larnaca experienced higher rises, indicating continued demand. On an annual basis, coastal districts, including Limassol and Larnaca, saw significant increases attributed to foreign buyers and investors, aligning with the headquartering policy framework.
House prices increased quarterly and annually in all districts, with Famagusta recording the highest quarterly increase at 4.3%. Apartments, except in Famagusta, showed price increases both quarterly and annually, with Paphos and Limassol leading the surge.
Sales documents recorded a notable 14.4% annual increase in Q3 2023, reflecting heightened demand with 3,830 sales compared to 3,347 in the same quarter of 2022. Foreign buyers contributed significantly, with a 13.7% annual increase, while domestic buyers increased by 15% on an annual basis.
The data signals a robust and dynamic housing market in Cyprus, marked by increased demand, shifting regional dynamics, and continued investment interest from both local and foreign buyers. The trend suggests the sustained growth of the real estate sector in the Republic of Cyprus.