Cyprus housing prices rise amid increased demand

During the fourth quarter of 2022, housing prices in Cyprus continued their upward trend, driven by increased construction costs and higher demand. According to the Central Bank of Cyprus (CBC), the Residential Property Price Index (RPPI) recorded a year-on-year increase of 6.6%, surpassing the 6.3% rise observed in the previous quarter of 2022.

Apartment prices experienced a notable increase of 7.7% in the fourth quarter of 2022, while house prices saw a growth of 5.6%.

Looking at specific districts, Paphos stood out with an impressive annual rise of 10.4% in house prices, while Limassol (9.3%), Larnaca (9.4%), and Paphos (8.6%) witnessed significant annual increases in apartment prices.

Despite the increase in key European Central Bank (ECB) interest rates and a subsequent decline in mortgage demand, the CBC noted that real estate demand has not been substantially affected thus far.

Quarterly changes in house prices during the fourth quarter of 2022 showed an increase in all districts except Famagusta. Nicosia saw a marginal increase of 0.3%, Limassol rose by 2.5%, Larnaca and Paphos increased by 2%, while Famagusta experienced a slight decrease of 0.8%.

In terms of annual changes, all districts recorded an increase in housing price indices. Nicosia witnessed a 3.5% rise, Limassol saw an 8.7% increase, Larnaca experienced a 5.1% growth, Paphos showed a 9.8% surge, and Famagusta recorded a 4.4% increase.

On an annual basis, housing price growth rates in Limassol, Larnaca, and Paphos accelerated, potentially influenced by the headquarters policy. Conversely, Nicosia and Famagusta experienced a slowdown in growth.

Quarterly changes in house prices were positive across all districts, with Nicosia increasing by 0.3%, Limassol by 1.2%, Larnaca by 1.7%, Paphos by 2.2%, and Famagusta marginally by 0.1%.

Similarly, on an annual basis, all districts saw an increase in house prices. Nicosia, Limassol, Larnaca, Paphos, and Famagusta recorded growth rates of 2.9%, 7.1%, 3.3%, 10.4%, and 4.2% respectively.

As for apartments, quarterly changes showed an upward trend in all districts except Famagusta. Nicosia saw a marginal increase of 0.2%, Limassol rose by 3.6%, Larnaca increased by 2.3%, Paphos saw a rise of 1.4%, while Famagusta experienced a decrease of 3.7%.

On a year-over-year basis, apartment prices continued to rise for the sixth consecutive quarter in all districts. In the fourth quarter of 2022 compared to the corresponding quarter of 2021, Nicosia witnessed a 4.3% increase, Limassol rose by 9.3%, Larnaca experienced a growth of 9.4%, Paphos showed a rise of 8.6%, and Famagusta recorded a 5.1% increase.