House prices rising at a slower rate

The increase in residential property prices continued to slow down in the fourth quarter of 2024, according to the Central Bank of Cyprus, which noted that the main cause is the high cost of construction materials and the high cost of borrowing.

Based on the CBC's quarterly results, during the fourth quarter of 2024, on an annual basis, the CBC's residential property price indices (houses and apartments) recorded a deceleration in increase, with the Apartment Price Index recording a greater slowdown compared to the House Price Index.

Various indices show that the real estate sector appears to be recording a general slowdown in its upward trajectory, as reflected by the slowdown in the increase in the number of sales documents, combined with the increase in supply (increase in the availability of housing for rent and sale). 

Inhibiting factors for the expansion of activity in the real estate sector, the CBC says, are the cost of construction materials, which continues to fluctuate at high levels, as well as the cost of borrowing, which continues to be relatively higher during the period under review compared to the previous five years. 

According to the CBC, in the fourth quarter of 2024, an acceleration in price increase was recorded only in Paphos (13.4%), while a slowdown was recorded in Nicosia, Limassol, Larnaca, and Famagusta (0.7%, 4.4%, 6.5% and 9.2%, respectively). 

On an annual basis, an acceleration in house price increase was recorded in Paphos (14.7%) while a slowdown was recorded in Limassol and Famagusta (5.1% and 7.8%, respectively). 

Nicosia recorded a decrease (-0.4%), while Larnaca recorded a stable annual growth rate (6.1%). 

On an annual basis, apartment prices increase slowed down in all districts. In Nicosia, apartment prices increased by 2.6%, in Limassol by 5.5%, in Larnaca by 8.7%, in Paphos by 12.1% and in Famagusta by 14.2%. During the fourth quarter of 2024, an annual increase in the number of sales documents was recorded in all districts except Nicosia and Famagusta, which recorded a decrease.

The residential property price indices for Cyprus are prepared by the Central Bank of Cyprus’s Real Estate Unit (REU), which is part of the Economic Analysis and Research Department, in collaboration with the member banks of the Association of Cyprus Banks (Bank of Cyprus, Hellenic Bank, Alpha Bank, National Bank of Greece, the Cyprus Development Bank, Societe Generale, Astro Bank, Ancoria Bank and Eurobank) and KEDIPES. 

The indices are based on property valuation data collected since 2006 by the contracted banks, which receive the relevant information from independent property surveyors in connection with mortgage transactions, such as housing loans, mortgage refinancing and mortgage collateral. 

The data, which are representative of the Cyprus property market, cover all the areas under the effective control of the Republic of Cyprus (Nicosia, Limassol, Larnaca, Paphos and Famagusta) and refer to residential properties (houses and apartments).

(Source: Central Bank of Cyprus)