Overview of the Housing Market
Residential Property Prices Show Continued Growth in the second quarter of 2024, according to the latest Residential Property Price Index (RPPI) released by the Central Bank of Cyprus. Both houses and apartments experienced steady price increases, despite signs of a market slowdown.
Annual and Quarterly Price Increases
Key Growth Figures
- Annual Growth: Residential property prices rose 8% in Q2 2024, compared to 7.8% in Q1 2024.
- Apartment Prices: Increased by 12%.
- House Prices: Grew by 6.2%.
Market Trends
- The Apartment Price Index showed a higher growth rate than the House Price Index.
- However, both indices indicated a slight slowdown in quarterly and annual price growth.
Factors Influencing the Market
Real Estate Sector Slowdown
Despite rising prices, several factors are causing a gradual market slowdown:
- Fewer sale contracts, reducing transaction volume and value.
- Increased housing supply, with more properties available for rent and sale.
- High mortgage interest rates, making homeownership less affordable.
- Minimal reductions in construction material costs, keeping development expenses high.
Regional Property Market Trends
District-Level Market Dynamics
Different districts exhibited varying trends in Q2 2024:
- Limassol & Nicosia: Supply is rising to meet steady demand.
- Larnaca & Paphos: Supply remains moderate, but demand continues to grow.
- Famagusta: Limited supply has kept prices rising, driven by new residential projects.
Quarterly Price Changes by District
- Fastest Growth: Paphos (3.5%) and Limassol (1.8%).
- Moderate Increases: Larnaca (2%) and Famagusta (1.2%).
- Stable Growth: Nicosia maintained steady price increases.
Annual Price Changes by District
- Largest Annual Increases:
- Paphos: 12.1%
- Limassol: 9.5%
- Moderate Growth:
- Larnaca: 9.9%
- Famagusta: 10.9%
- Nicosia: 2.4%
House Price Variations by District
Quarterly Changes
- Price Increases:
- Limassol (3.3%)
- Larnaca (2.1%)
- Paphos (3.7%)
- Declines:
- Nicosia (-0.5%)
- Famagusta (0.8%) (smallest increase).
Annual Changes
- Strong Growth:
- Limassol (7.7%)
- Larnaca (7%)
- Paphos (10.1%)
- Declines:
- Nicosia (-1.3%)
- Famagusta (-9.4%)
Real Estate Demand and Supply Trends
Demand Shifts
According to the Department of Lands and Surveys (DLS):
- Total sale contracts declined in Q2 2024.
- Domestic buyer activity increased, while foreign buyer activity decreased.
- Regional Sales Trends:
- Sales declined in Limassol, Paphos, and Famagusta.
- Sales increased in Nicosia and Larnaca.
Supply Trends
- New housing supply is increasing, supported by more approved building permits.
- Lower construction material costs are helping new projects.
- Limassol recorded the highest transaction volume, while Nicosia led in apartment sales.
Conclusion: Market Trends to Watch
Residential Property Prices Show Continued Growth, but the market is showing signs of gradual cooling. High mortgage rates and increased housing supply could impact future price trends. However, demand remains strong in key districts, particularly for apartments, keeping the market dynamic.
Discover more property news and home advice by reading our other blogs on Properush.
Source: Cyprus Property News
