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Property prices & Demand on the Rise in Cyprus

RaftisGroup

RaftisGroup

Paphos-focused real estate developer since 1975

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Prices for most property types in Cyprus are rising, according to the latest edition of the RICS Cyprus Property Price Index with KPMG.

The most recent Property Price Index (for the fourth quarter of 2021) also reports that demand for properties is increasing as the market continues to recover from the COVID-19 pandemic, with transactions increasing 15% during the trimester.

The number of sales of real estate to non-EU citizens who registered sales contracts in the property registries increased by 20% compared to the previous quarter and by 30% compared to the fourth quarter of 2021. The problems of non-performing loans and debt due to asset swaps have decreased for most banks; they are still present, but to a lesser extent than in previous years.

On the subject of delinquency, the statistical office of the European Union (Eurostat) reported last month that:

“In 2020, Cyprus remained the country with the largest stock of non-performing government loans (assets) at 28.3% of GDP, a much higher proportion compared to other EU member states. This was due to a major transaction in 2018 in which bad loans were transferred from a Cyprus public finance company (classified as non-state) to a state entity. “

Three other EU Member States recorded a share of more than 1% of GDP: Slovenia (2.2%), Portugal (1.5%) and Croatia (1.4%). For Cyprus, Slovenia, and Portugal, the majority of non-performing loans relate to loans from debt relief financial structures. In the case of Croatia, the figure refers mainly to loans from a national development bank (classified within the general government sector)”.

– Eurostat

An increase in property prices

Apartment prices rose 1.47% and were flat for houses. The largest increases in apartment prices were recorded in Paphos, at 2.92%, and Nicosia, at 2.24%. Holiday home values ​​in Cyprus increased 0.30% for apartments but fell -0.70% for houses in the fourth quarter. The largest increase in holiday rentals was recorded in Paphos, up 1.81%, while the biggest drop in house prices was recorded in Limassol, at -1.5%. On an annual basis, apartment prices increased by 1.47%, while house prices were steady. For their part, retail, warehouse, and office prices rose 0.34%, 0.48%, and 0.45%, respectively. 

Rent values ​​went up 

Most rental values ​​increased in the fourth quarter; 0.65% for houses, 1.23% for apartments, 1.58% for offices, and 1.34% for warehouses. However, small declines were recorded in vacation homes, with a 0.12% decline in apartment rental values ​​and a 0.53% decline in home rental values.

Rental income 

The average gross rental return was 4.9% for apartments, 2.6% for houses, 5.7% for shops, 4.5% for warehouses, and 5.2% for offices.