Cyprus Property Market 2022Q3

The acceleration of residential property price increases continues in 2022Q3, owing primarily to higher construction costs.

The Central Bank of Cyprus (CBC)1 Residential Property Price Index (RPPI) (apartments and houses) continued its upward trend in 2022Q3, with a quarterly increase of 2,1% compared to 1,7% in the previous quarter, and an annual increase of 6,3% compared to 4,7% in the previous quarter.

 The main reason for the acceleration in residential property price hikes remains rising construction costs, however growing demand for real estate has also contributed.

For the second quarter in a row, the RPPI rises in all districts, including apartment and home prices.

Real estate transactions in the first nine months of 2022 show accelerating growth, which may be linked to annual increases in demand from both domestic and foreign buyers, according to data from the Department of Lands and Surveys. The increase in foreign investor sales contracts is mostly due to the Strategy for Attracting Businesses for Activities or Expansion of their Activities in Cyprus (International Headquartering). More than a thousand foreign firms have registered in Cyprus in the context of International Headquartering in 2022, according to data from the Ministry of Energy, Commerce, and Industry.

Inflationary pressures, which have a large impact on construction costs, persist in 2022Q3 but do not appear to have had a significant impact on demand. The increase in borrowing costs as a result of the ECB's basic interest rate hike appears to have had a negative impact on demand for house loans in 2023Q3, which may hinder future construction activity.

Sourcing: https://www.centralbank.cy/images/media/pdf/RPPI%202022Q3_ENG_FINAL%200001.pdf