Cyprus property sales close to €6 billion, apartment prices and rents shoot up

The Cyprus real estate market enjoyed a strong second half of the year, pushing the total value of all property sales to €5.8 billion for 2022, according to a report released this week by the Council for Registration of Real Estate Agents.

According to the report, there were 10,680 real estate transactions in the first half of the year, with a total value of €2.5 billion.

In the second half of 2022, the number of transactions increased to 11,449, while the total value of all real estate sold amounted to €3.3 billion.

Council for Registration of Real Estate Agents president Marinos Kineyirou said that the dynamics of the real estate sector throughout the past year contributed decisively to the positive growth rates of the Cypriot economy.

“It is very important that the next government takes seriously the parameters that affect the market and the real estate sector in general, so that it can be supported and continue to perform, both during the difficult year that we are currently going through, but also in the long term as well,” Kineyirou said.

Limassol and Nicosia hold the lead in the real estate market both in terms of transaction volume and value.

According to Land and Survey Department data, the market in both districts performed better during the second half of 2022 compared to the first two quarters.

In Nicosia, the volume of transactions carried out during the second half of the year was smaller compared to the first, but the value of the properties sold was higher.

Conversely, Limassol saw an increase in the second half of the year, both in the volume of transactions as well as their total value.

Limassol’s performance strengthened in the second half if we take into account the fact that the value of sales transactions exceeded by almost €0.5 billion the value of transactions in the first half.

“2022 was one of the best years in recent times for the real estate sector in the city and district of Paphos,” the council noted in its report.

“The momentum of the first half of the year was significantly strengthened in the second half of 2022 when the value of all properties sold exceeded €0.5 billion,” it added.

Moreover, there was an increase in the volume of transactions and the value of the properties sold in the second half of the year both in Larnaca and Famagusta.

Regarding the trends across each district, the report notes that the four main property categories reflect the trends that prevailed in each district during the first and second half of 2022.

Nicosia stood out in the first half in apartment sales with 1,098, Limassol in land sales with 1,098, Paphos in house sales with 357, and Larnaca in residential plot sales with 682.

In the second half of the year, Limassol stood out, regaining the reins in terms of apartment sales with 877, while Nicosia followed with 819 apartment sales, dropping to second place in this particular category.

Paphos saw the highest number of house sales, with 414 transactions being completed during this time, while Larnaca and Famagusta recorded a significant increase in house and apartment sales compared to the first half of 2022.

The council also clarified that in many cases, properties categorized as fields or plots of land also include a building.

Apartment prices and rental costs shoot up

Meanwhile, according to a report by Cypriot fintech Ask WiRE, property prices in Cyprus increased by 9.9 per cent year-on-year for apartments during the fourth quarter of 2022, followed by 1 per cent for houses, and 0.3 per cent for offices.

In addition, holiday apartments rose by 4.7 per cent year-on-year, followed by holiday houses by 0.9 per cent. Conversely, retail property prices decreased by 1.4 per cent, while warehouse prices fell by 3.7 per cent.

“Nicosia stands out from other districts, as sale prices of apartments continued to rise throughout the year, rising by 2.5 per cent in the fourth quarter 2022,” the company said. 

“Overall, on a quarterly basis, sale values increased by 1.6 per cent for apartments, 0.1 per cent for houses, 0.4 per cent for offices, and remained stable for retail and warehouses,” it added.

Regarding holiday apartments and holiday houses, sale values increased by 1.9 per cent and 0.4 per cent respectively.

Regarding rental values, compared to the final quarter of 2021, there has been an increase of 18.2 per cent for apartments, 11.6 per cent for houses, 0.9 per cent for retail, 6.3 per cent for offices, 16.9 per cent for holiday apartments and 12.8 per cent for holiday houses.

On the other hand, warehouse rents decreased by 0.4 per cent year-on-year during the fourth quarter of 2022. 

“Paphos stands out from the districts, as rental values of holiday apartments and holiday houses had a significant increase for another quarter, increasing by 5 per cent and 11.8 per cent respectively in the fourth quarter of 2022,” Ask WiRE noted. 

On a quarterly basis, rental values increased by 2.7 per cent for apartments, 1.1 per cent for houses, 1.7 per cent for retail, 0.8 per cent for offices, and remained stable for warehouses. 

In terms of holiday apartments and houses, rental values increased by 3.6 per cent and 5.9 per cent respectively.

“The influx in population due to in-migration throughout 2022 and pent-up demand over the past couple of years continues to drive the residential market. With inflation eroding disposable incomes and interest rates rising, we have seen a slowing down of demand in the second half of the year and prices stabilizing in Nicosia and Limassol,” Ask WiRE CEO Pavlos Loizou said.

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

Loizou concluded by saying that “looking ahead to 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”.