Apartments keep on dominating the real estate market in Cyprus

According to the most recent RICS Cyprus Property Price Index, which was created in collaboration with KPMG, apartment sales remained the key driver of Cyprus' real estate market in the third quarter of 2024. Apartments continue to dominate the market despite signs of stability, with the majority of other property types experiencing just slight changes.

Even though there was little demand for retail and warehouse space, the report states that apartment prices increased by 0.8% during the quarter, continuing a trend of consistent increase. Data shows significant increases in apartment values year over year, with demand for apartments exceeding that of residential and commercial properties.

While commercial real estate had a decrease from the same time last year, warehouse assets saw modest price improvements. Significant regional variations were also observed: Paphos had growth in more general residential categories, while Larnaca and Paphos had the largest increases in apartment prices. Whereas Limassol had decreases in all property categories, Nicosia and Famagusta had increases mostly in apartment prices.

All types of rental values increased in comparison to the previous year, with apartments having the biggest increase, followed by residential properties. Commercial and warehouse rentals, on the other hand, increased very little.

The prices of houses and apartments in the holiday home segment were essentially unchanged from the prior quarter. Year-over-year data, however, points to a continuing upward trend in vacation property values, especially for holiday homes and apartments. The value of holiday homes increased somewhat in Paphos and Famagusta, decreased in Limassol, and remained the same in Larnaca.

According to RICS Chief Economist Simon Rubinsohn, "the sentiment captured in the RICS Global Commercial Property Monitor remains positive" despite some indications of a levelling trend in property values. According to Rubinsohn, investor interest is growing and the market for residential real estate is remaining stable. He stated that "improving credit conditions will likely strengthen the property market in the months to come".

The head of deal advisory and board member of KPMG Cyprus, Christophoros Anayiotos, noted that the index in Q3 2024 exhibits "increasing signs of stability, with slight modifications across most property categories". He underlined that while demand for retail and warehouse space is still low, apartments are the best investment". "At a district level", Anayiotos stated, "Nicosia remains strong in residential apartments, while Paphos and Famagusta performing well, whereas Limassol shows slight declines across property types".

He finished by saying that while rental values have increased overall compared to prior years, property yields have only slightly changed. "Rental values continue to grow in residential sectors but remain flat for retail properties", he said.

The data from this quarter confirms that, despite indications of general market stability, apartments continue to be popular in Cyprus' real estate market.