Cyprus property market: mixed outlook despite rising values

Cypriot firm Ask Wire, a technology-informed real estate company, on Thursday released its quarterly report for the local property market.

The report indicated a mixed outlook for the real estate market in Cyprus, despite the annual increases in rental values across various property types.

Pavlos Loizou, CEO of Ask Wire, commented that “the rising trend in property values and rental rates since Q3 2022 isn’t slowing down, particularly due to the increase in prices especially for in Limassol and Larnaca”.

“Nevertheless, the blend of political instability in the area, increased inflation, and upward trajectory of prices and rents have established a stable, although high, market threshold,” he added.

On an annual basis, the Ask Wire Index shows a significant surge in property prices, with apartments leading the way with a 12.2 per cent increase, followed by houses at 4.6 per cent, and offices at 4.4 per cent.

Retail experienced a modest 1.2 per cent increase, holiday apartments saw an 8.8 per cent rise, while holiday houses and warehouses recorded 3.7 per cent and a 1.5 per cent decrease, respectively.

Overall, on a quarterly basis, apartments and offices saw increases of 2.2 per cent and 1.3 per cent, respectively.

Houses, retail, and warehouses remained stable, while holiday apartments increased by 0.8 per cent, and holiday houses remained unchanged.

Rental values also experienced positive growth compared to Q3 2022, with apartments leading the trend with a remarkable 13.3 per cent increase, followed by houses at 9.2 per cent, and offices at 9.9 per cent.

Retail and holiday apartments recorded increases of 6.6 per cent and 13.4 per cent, respectively. Holiday houses experienced an 11.0 per cent growth, while warehouses saw a slight decrease of 0.6 per cent.

On a quarterly basis, apartments, retail, offices, holiday apartments, and holiday houses continued their upward trajectory, with increases ranging from 0.1 per cent to 3.5 per cent.

However, houses and warehouses experienced marginal changes, and the latter saw a decrease of 1.1 per cent.

Despite these positive trends, the Ask Wire Index suggests a potential decrease in demand for residential properties in Q4 2023, signalling a mixed outlook for the real estate market in Cyprus.

“Looking forward to Q4 2023, we expect residential property prices to remain fairly steady, despite potentially slower demand and reduced transaction volume,” Loizou said.

“We also expect commercial property pricing to come under increased pressure, as alternative investments provide attractive risk-adjusted returns,” the Ask Wire CEO concluded.