Property prices and rental rates in Cyprus have risen yet again

Ask Wire, a Cypriot real estate and technology business, presented the latest iteration of its property market index on Wednesday, updated to include the first quarter of 2023, revealing that property prices and rentals grew once more.

The Ask Wire Index, which provides valuable insights into Cyprus's property sales and rental values, covers all districts and major property types, with values recorded beginning in the fourth quarter of 2009.

According to the index, property prices in Cyprus climbed by 12.3% year on year for flats, 3.1% for homes, 2.4% for offices, 8% for holiday apartments, and 3.1% for holiday houses.

Retail and warehouse prices, on the other hand, fell by 0.1 percent and 1.8 percent, respectively.

On a quarterly basis, the sale prices of flats climbed by 3.2%, homes by 1.3%, shops by 0.4%, and offices by 1.4%, while warehouse prices remained steady.

Meanwhile, the sale prices of holiday apartments and houses increased by 1.8% and 1.5%, respectively.

In terms of rental values, there has been a significant increase in comparison to the first quarter of 2022, with apartments increasing by 19%, houses increasing by 12.2%, retail increasing by 3.3%, warehouses increasing by 1%, offices increasing by 7.5%, holiday apartments increasing by 19.1%, and holiday houses increasing by 14.5%.

Rental values climbed by 2.6% for flats, 1.5% for homes, 0.7% for retail, 0.8% for offices, and remained steady for warehouses on a quarterly basis.

Furthermore, rental values for holiday apartments and residences increased by 2.3% and 1.3%, respectively.

According to Pavlos Loizou, CEO of Ask Wire, "the increase in property prices and rents is showing signs of slowing, following significant increases since the first quarter of 2022 and being led by flat and house prices in Limassol, Paphos, and Larnaca."

“The combination of higher interest rates and high prices and rents has created a ceiling, with the market being generally stable, but at high levels,” he added.

Loizou also noted that he expects commercial property pricing to be under pressure, since other investment categories provide excellent returns in terms of the degrees of risk involved.

“We expect the pricing of commercial properties to come under pressure, as alternative investment classes offer appealing returns on a risk-adjusted basis,” Loizou said.

“Looking ahead to the second half of 2023, we expect residential property prices to remain broadly stable, albeit with slowing demand and less transaction volume, whilst commercial real estate will face various challenges, with investor demand remaining relatively thin,” he concluded.

By fLEXI tEAM