According to the latest edition of the RICS Cyprus Property Price Index, prices for most types of property in Cyprus are increasing and Housing market values are expected to continue increasing in 2022. After a major pause in 2020, due to the pandemic, Cyprus housing market is now showing sign of recovering. Low interest rates, coupled with government relief measures, are currently driving property demand and construction activity. Residential construction activity has quickly bounced back. It is remarkable that in the first four months of 2021, the number of value of residential building permits rose by 45% and are continue rising this year.
The same Price Index also report that demand for property is increasing as the market continued to recover from the pandemic, with a 15% rise in transactions over the last quarter. Prices for residential apartments increased by 1.5% and remained steady for houses. The largest increase in apartment prices were recorded in Paphos, up by 2.3%, and in Nicosia, up by 2.3%. Values for holiday homes across Cyprus during last quarter rose by 0.30% for apartments but fell by 0.70% for houses. The largest increase was recorded in Paphos by 1.81% for holiday apartments; the largest fall, while the largest fall in house prices, 1.5%, was recorded in Limassol. On an annual basis, apartment price rose by 1.5%, while house prices remained steady.
The Cyprus real estate market has historically been divided into the major urban centres of Nicosia, Limassol and Larnaca, which are primarily driven by local demand; and the seaside resort areas of Paphos and Famagusta, which are mostly driven by foreign demand.
Foreigners can buy one home in Cyprus, and are entitled to hold land freehold, but there is a maximum limit on land ownership of 3 donums which is equal to 4,014 square meter.
Overall, Cyprus housing market is expected to rise during the remainder of the year in the areas of Nicosia and Limassol. On the other hand activity and prices in the main commercial centres of Nicosia and Limassol are currently stable, as locals are acquiring residential properties taking advantage of various government subsidy and in order to generate income from residential property. However, the other districts, Larnaka, Paphos and Famagusta are continuing to experience low levels of demand, as they are more reliant on overseas market and have a higher dependency on tourism.
Rental housing values also increasing in 2022.
Over the last quarter, most rental values rose; 0.65% for house, 1.25% for apartment, 1.6% for office space and 1.35% for warehouse space. However, small falls were recorded in holiday homes with rental values apartments down 0.12% and house rental values falling by 0.55%. In Ayia Napa, a Mediterranean resort town on the southeast coast of Cyprus, monthly rent for one- to two-bedroom apartment range from €800 to €1,500. Three- to four-bedroom villa can be rented for €2,000 to €5,000 per month.
Average gross rental yield stood at 5% for apartment and 2.5% for house. Nicosia and Limassol usually offer higher gross rental yields as compared to other Cypriot cities.
Originally published at https://www.youtube.com/watch?v=zGQ7rBx6_Ig