Cyprus property prices and rental costs surge once again

Cypriot real estate and technology company Ask Wire on Wednesday released the latest iteration of its property market index, updated to include the first quarter of 2023, revealing that property prices and rents increased once again.

The Ask Wire Index, which provides valuable insights into property sales and rental values across Cyprus, covers all districts and main property types, with values tracked from the fourth quarter of 2009 onwards.

According to the index, property prices across Cyprus increased by 12.3 per cent year-on-year for apartments, 3.1 per cent for houses, 2.4 per cent for offices, 8 per cent for holiday apartments, and 3.1 per cent for holiday houses.

However, retail and warehouses experienced a decrease in price, dropping by 0.1 per cent and 1.8 per cent respectively.

On a quarterly basis, the sale values of apartments increased by 3.2 per cent, houses by 1.3 per cent, retail by 0.4 per cent, and offices by 1.4 per cent, while warehouse prices remained stable.

Meanwhile, holiday apartments and houses saw an increase in sale values by 1.8 per cent and 1.5 per cent respectively.

In terms of rental values, there has been a significant increase in comparison to the first quarter of 2022, with apartments experiencing an increase of 19 per cent, houses by 12.2 per cent, retail by 3.3 per cent, warehouses by 1 per cent, offices by 7.5 per cent, holiday apartments by 19.1 per cent, and holiday houses by 14.5 per cent.

On a quarterly basis, rental values increased by 2.6 per cent for apartments, 1.5 per cent for houses, 0.7 per cent for retail, 0.8 per cent for offices, and remained stable for warehouses.

In addition, holiday apartments and houses saw an increase in rental values by 2.3 per cent and 1.3 per cent respectively.

Pavlos Loizou, CEO of Ask Wire, commented on the findings of the index, stating that “the increase in property prices and rents is showing signs of slow down, following significant increases since the first quarter of 2022 and being led by apartment and house prices in Limassol, Paphos, and Larnaca”.

“The combination of higher interest rates and high prices and rents has created a ceiling, with the market being generally stable, but at high levels,” he added.

Loizou also stated that he anticipates that the pricing of commercial properties might be under pressure, as other investment categories provide attractive returns, in terms of the levels of risk involved.

“We expect the pricing of commercial properties to come under pressure, as alternative investment classes offer appealing returns on a risk-adjusted basis,” Loizou said.

“Looking ahead to the second half of 2023, we expect residential property prices to remain broadly stable, albeit with slowing demand and less transaction volume, whilst commercial real estate will face various challenges, with investor demand remaining relatively thin,” he concluded.