Housing prices and rents rise by 10%: unaffordable for many

According to the most recent "RICS Cyprus Property Price Index" study, which was created in collaboration with KPMG in Cyprus, apartment prices and rents increased by more than 10% in the first quarter of 2024 when compared to the same time the previous year.

In particular, compared to the same quarter in 2023, the RICS index showed a 9.30% increase in apartment values in the first quarter of 2024. The value of properties increased by 5.49% for houses, 0.08% for commercial properties, 3.75% for warehouses, and 2.54% for offices.

Rents experienced large increases as well. Compared to the first quarter of 2023, rental prices for apartments increased by 10.57%, houses by 9.55%, commercial properties by 0.98%, warehouses by 1.82%, office spaces by 5.53%, vacation apartments by 7.44%, and vacation homes by 6.45%.

Quarterly gains were driven by residential properties. Nicosia had rises in three categories, while Limassol showed stability in all but warehouses. Notably, warehouse values increased greatly in Nicosia and Larnaca but decreased in Paphos. The least desirable real estate for investment seems to be commercial properties.

With the exception of apartments, which continue to grow, especially in Nicosia and Paphos, the market appears to be stabilising across most property categories, according to Christoforos Anagiotos, Managing Director and Head of Real Estate and Land Development at KPMG Cyprus. While they were steady elsewhere, Nicosia saw a rise in residential values. Both offices and warehouses had marginal increases. Nicosia and Larnaca had seen the greatest results for offices and warehouses, respectively. Shop values continued the pattern from Q4 2023, being steady with a little reduction in Larnaca. In Paphos and Limassol, warehouse values decreased along with a reduction in retail values. Particularly for residential buildings, rents increased."

Chief Economist of RICS Simon Rubinsohn continued, saying, "Despite worries about the current account deficit, the Cypriot economy is nevertheless healthy because of strong domestic demand. As seen by this research and the better mood in the recently released RICS Global Commercial Property Monitor for Q1 2024, this optimistic view helps the real estate industry."