By Marinos Kyneyiros*
The prices in the Cyprus real estate market have been going up in recent years. This increase is mainly due to higher costs of construction materials and growing demand. As a result, both rent prices and home/apartment sales are on the rise.
Lately, it's become noticeable that many property owners, land developers, and individuals are asking for unusually high selling prices and significantly higher rents for their properties. With our extensive experience in the Cyprus real estate market, we can distinguish when prices make sense, align with data, or become unreasonable. While we've previously discussed the impact of increased demand and reduced supply on real estate prices, there are currently some prices that don't conform to the traditional and logical trends of the Cyprus real estate market.
The Central Bank of Cyprus data for the first quarter of 2023 is revealing. The House Price Index indicates a 7.7% increase compared to the same quarter last year. Specifically, house prices have risen by 6.6% annually, and apartments have seen an 8.4% increase. These increases are significant, considering, for example, that an apartment that was €150,000 in the first quarter of 2022 now sells for €163,000, and a house that was €250,000 now goes for €265,000.
This situation raises concerns, especially because higher interest rates are making it more challenging for households to afford buying homes or apartments. Additionally, rising rental prices are straining the finances of tenants, causing significant problems for them.
Real estate agents, who regularly interact with sellers, buyers, and tenants, often face complaints about the prices being offered. In recent months, many colleagues have received criticism from potential buyers and tenants. It's important to note that real estate agents don't set the selling or rental prices for apartments and houses. As the Estate Agents Registration Council, we are committed to clarifying these roles in the property market in the near future. However, excessive price increases should not be left to chance, as they can harm the entire sector and the economy.
*Marinos Kyneyiros, MRICS, President of Real Estate Agents Registration Board