Cyprus real estate booms in Q3 of 2023
Cyprus experienced a real estate boom in the third quarter of 2023, with housing prices soaring and a surge in demand from both domestic and foreign buyers, according to data released by the Central Bank of Cyprus (CBC) on Wednesday. The Residential Property Price Index (RPPI) maintained by the CBC demonstrates a consistent upward trajectory, signaling annual and quarterly increases. Meanwhile, data from the Department of Lands and Surveys reveals a notable uptick in property transactions during the same period.
This heightened demand is credited to domestic buyers, including those seeking buy-to-let opportunities, and foreign investors.
Despite increased demand, construction activity has seen a dip in the issuance of building permits for residential buildings from January to August 2023 compared to the same period in 2022. This trend is linked to the escalating costs associated with construction and loans.
The limited supply of new properties in the market, coupled with heightened demand, has emerged as the primary driving force behind the RPPI’s surge during Q3 2023.
The RPPI for houses and apartments witnessed a 2.2% increase in Q3 2023, compared to a 1.5% rise in the previous quarter. This growth is attributed to a 1.4% increase in house prices and a notable 3.6% surge in apartment prices.
On an annual basis, property prices exhibited a robust 7.6% increase in Q3, with apartment prices leading the way with an 11.5% surge, while house prices increased by 4.9%.
Quarterly housing prices experienced an uptick across all districts during Q3 2023, marking the third consecutive quarter of growth. Limassol emerged as the front-runner with the highest quarterly increase at 2.9%, closely followed by Larnaca (2.8%), Famagusta (2.8%), Pafos (2.4%) and Nicosia (0.7%).
On an annual basis, all districts observed an RPPI increase, with Larnaca leading the pack at an impressive 10.5%, followed by Limassol (10.1%), Pafos (7.6%), Famagusta (6.4%) and Nicosia (3.9%). Coastal areas experienced relatively higher rates due to increased demand from foreign buyers.
The Land Registry reported a significant 14.4% annual increase in sales documents during Q3 2023, reflecting the growing demand for properties. Foreign buyer acquisitions rose by 13.7% annually, while domestic purchases increased 15%.
