Increase of property supply leads to decline of housing prices

The increase in the property supply has contributed to a decline in prices in Cyprus in recent months, according to the latest figures reported by the Statistical Service of Cyprus (CyStat) this week.

The number of building permits issued by the municipal authorities and the district administration offices in January 2022 increased by 8.3% compared to the corresponding month in the previous year, according to data released on Thursday. The total number stood at 535.

The total value of these permits increased by 3.4% and the total area by 10.1%. The number of dwelling units recorded a decrease of 8.8%. The total value of these permits reached 165.5 million euros and the total area 158,000 square meters. These building permits provide for the construction of 640 dwelling units.

The Output Prices Index in Construction in the fourth quarter of 2021 recorded an annual increase of 9.3%. CyStat said it reached 121.29 units (base year 2015=100.00), recording an increase of 3.9% over the third quarter of 2021. Compared to the same quarter of the previous year, the index increased by 9.3%.

By type of project, an increase of 9.4% was observed for buildings and 8.9% for civil engineering projects in the fourth quarter of 2021 compared to the corresponding quarter of 2020.

For the period January-December 2021, the overall index registered an increase of 5.2% over the corresponding period of 2020. A 6.4% increase was recorded in the index for buildings and a 1.2% rise in the index for civil engineering projects.

Meanwhile, an annual decrease was recorded in the Index of Production in Construction in the fourth quarter of last year. CyStat said the Index of Production in Construction reached 209.58 units (base year 2015=100.00) during the fourth quarter of 2021, recording a decrease of 5.5% over the fourth quarter of 2020.

An annual drop of 5.3% was recorded in the Cyprus House Price Index (HPI) during the fourth quarter of last year. According to a preliminary estimate CyStat, the HPI for the fourth quarter of 2021 amounted to 103.28 units.

Compared to the third quarter of 2021, the HPI decreased by 3.1% while compared to the index of the corresponding quarter of 2020, it fell by 5.3%.