Renting became more expensive in previous year

Rental values for both apartments and houses rose during the fourth quarter of the previous year, according to a report released this week by independent real estate asset management and advisory firm WiRE.

Rental values increased by 1 per cent quarter-on-quarter for apartments and 1.7 per cent for houses, while falling by 0.6 per cent for retail properties, 1.3 per cent for warehouses, and 1.4 per cent for offices.

The rental values of holiday apartments and houses also increased from the previous quarter by 1.5 per cent and 2 per cent respectively.

“The strong labour market, the availability of credit for mortgages, and pend-up demand over the past couple of years continues to drive the residential market as investors are looking at ways to generate income,” WiRE CEO Pavlos Loizou said.

“In contrast, the changing landscape around office use and the structure of Cyprus’ banks (less staff, fewer branches), as well as the move to online purchases and the appeal of newly opened shopping malls/ destinations in Nicosia and Larnaca, is having a significant impact on the office and retail market,” Loizou added.

The fluctuation of rental values on an annual basis showed similar tendencies, with rental values rising for apartments (2 per cent), houses (0.4 per cent) and holiday apartments (0.9 per cent), while falling for retail space (5.5 per cent), warehouses (3.2 per cent), offices (6.7 per cent) and holiday homes (1.4 per cent).

The most noteworthy changes took place in Larnaca, where rental values for holiday apartments rose by 6.3 per cent quarter-on-quarter at the end of 2021.

“We are still away from seeing a return to stability, let alone observe an uptake in the commercial market or a sense of direction in purchase and prices for holiday homes,” Loizou explained.

In terms of property sales in the fourth quarter, values increased by 1.4 per cent for apartments and 0.5 per cent for houses, both quarter-on-quarter.

Conversely, values dropped by 0.5 per cent for retail space, 2 per cent for warehouses, and 0.3 per cent for offices.

Meanwhile, holiday apartment values rose by 1 per cent quarter-on-quarter, while holiday house values fell by 0.1 per cent.

In annual terms, apartment values rose by 2.2 per cent year-on-year, while holiday apartments increased by 0.7 per cent.

Moreover, houses (0.5 per cent), retail properties (3.4 per cent), warehouses (4.5 per cent), offices (2.1 per cent) and holiday houses (3.7 per cent) all decreased in average value during 2021.

Again, Larnaca offered the sharpest increase, with apartment values exhibiting a 2.5 per cent quarterly increase at the end of the previous year.