Cyprus property prices ‘escalating beyond traditional expectations’

The upward trajectory of property prices in Cyprus over recent years, driven notably by the rising cost of construction materials and increased demand, has prompted concerns among experts, including Marinos Kineyirou, president of the Council for Registration of Real Estate Agents, who voiced his thoughts on the matter.

“We have noticed in recent times that many property owners, land development entrepreneurs, and even private individuals are seeking unnaturally high selling and rental prices for their properties,” Kineyirou said.

Drawing upon years of experience in the Cypriot real estate market, he added that “we can discern when prices are within reasonable bounds and when they deviate from the norm”.

Recent data from the Central Bank of Cyprus (CBC), specifically for the first quarter of 2023, lends credence to Kineyirou’s observations.

The House Price Index shows a 7.7 per cent increase compared to the same period the previous year.

Notably, housing prices have risen by 6.6 per cent on an annual basis, while apartment prices have surged by 8.4 per cent.

These increases are significant, considering that, for example, an apartment valued at €150,000 in the first quarter of 2022 is now selling for approximately €163,000, and similarly, a house valued at €250,000 is now approximately €265,000.

For example, in Limassol, where prices have been the most extreme, real estate sales reached nearly €500 million in value during the second quarter of 2023, with the majority of buyer interest in apartments valued between €100,000 and €500,000.

A total of 1,383 properties were sold during this time, amounting to €437.9 million. Limassol remains a key player in Cyprus’s real estate market, with apartments in the €100,000 to €500,000 range being particularly popular.

In the capital, there were 553 apartment sales, 184 house sales, 312 land sales, and 218 land plot sales during the second quarter of 2023.

The value of apartments sold reached €99.7 million, houses at €46.5 million, land at €20.2 million, and land plots at €38.6 million.

Nicosia accounted for 29.5 per cent of apartment sales nationwide. What is more, according to a recently published report, buyers in Nicosia displayed strong interest in apartments priced between €100,000 and €200,000, with almost six out of ten apartments sold falling within this price range.

In addition, four apartments were sold for over €1 million in the Cypriot capital.

Moreover, more than half of house sales in the Nicosia district (99 out of 184) were in the €100,000 to €300,000 price range. Two houses were sold at prices exceeding €1 million.

This trend is raising concerns, Kineyirou noted, particularly as households face financial constraints in the property market, exacerbated by rising interest rates.

At the same time, general inflation continues to erode the incomes of renting households, posing significant challenges for tenants.

Kineyirou also highlighted the role of real estate agents, who often find themselves in the middle of negotiations between buyers, sellers, and renters.

“In recent months, many colleagues have been subject to critical comments from potential buyers and renters,” he explained.

“It is important for people to understand that real estate agents do not determine the selling or rental prices of properties,” he added.

Concluding his analysis, Kineyirou stressed that while real estate agents do not set property prices, the excessive price hikes represent a significant concern that cannot be left unchecked, as they could have detrimental effects on the entire sector and the broader economy.

The Council for Registration of Real Estate Agents, he said, is “committed to intensifying efforts to raise awareness about the roles and responsibilities within the property market while addressing these market dynamics”.

Source: Cyprus Mail - Kyriacos Nicolaou

Author: Christos Nikolaou

BEng Mechanical Engineering, MSc Real Estate, ETEK Property Valuer, Register and Licensed Real Estate Agent.

Christos Nikolaou is the founder and Managing Director of Property Canvas, he holds a license as an Estate Agent from the Association of Real Estate Agents of Cyprus and he is a registered Property Valuer in the Technical and Scientific Chamber of Cyprus (ETEK). He is the author of our “Cyprus property prices ‘escalating beyond traditional expectations’” and is a certified advance negotiator.