As the Cyprus economy bounces back, so are Cyprus house prices. But what property is rising fastest, where, and will it continue?
Economic trends in Cyprus have been generally positive over the past year and the evidence from RICS proves it’s supporting house prices too.
The global economy has been in all sorts of turmoil since the pandemic, with inflation rates going through the roof and central banks raising interest rates in an effort to dampen down the economy and prices with it.
The Cyprus house market has been boosted by a strong economy
Cyprus’ economic sentiment
While the European Central Bank (ECB) – which governs interest rates in the eurozone and, hence, Cyprus – has been trying to cool the economy, Cyprus’s economic indicators remain positive.
Those who retire to Cyprus will see a hefty real-terms increase in the value of their pension.
Inflation fell to 5.8% in Cyprus last month, its lowest level for over a year and barely half that of the UK’s current 10.4%. (Incidentally, given that UK pensions are raised by the UK inflation rate each year, those who retire to Cyprus will see a hefty real-terms increase in the value of their pension – another great reason to retire there!)
The largest falls in inflation came from food and non-alcoholic drink and also housing and utility costs. It has to be said, the latter are still rising at an incredible rate of 15%, but it’s a lot less than before.
Other positive economic indicators are Gross Domestic Product (GDP, aka the size of the economy), which is growing at around 4.5% compared to the UK’s 0.6% and even Germany’s 0.9%!
Business and consumer confidence are at their highest rate for a year. So given all that, what s happening to Cyprus house prices?
Find homes in Cyprus via our property portal.
A traditional Cypriot village
Cyprus house prices
According to the Royal Institution of Chartered Surveyors (RICS), the prestigious UK organization that also operates in Cyprus, the last quarter of 2022 “saw a further increase in the price of residential properties (Apartments and Houses), both of which continue to be relatively strong performers over the quarter.”
Their data (Figure 1) shows a strong increase in property values between September and December last year:
Figure 1: quarter-on-quarter property price rises.
Taking that as an annual rate across the island:
As they point out, holiday apartments are now 40% more valuable than in 2016 and holiday houses around 30%.
Like everywhere, it can be hard to get a good builder in Cyprus and with rising prices for raw materials contributing to all-round higher construction costs, resale homes are proving more popular than new builds.
A young couple reviewing plans with their builder
The Ukraine War has had a mixed effect on house prices in Cyprus too, as the Russians were big buyers in Cyprus. Then again, so were the Ukrainians, and they are continuing to be welcomed. Hence there has been some alteration in the make-up of buyers and that will be having a regional effect on prices.
Real estate sales to people from abroad increased from 2,432 to 4,123 last year, and that’s even with the golden visa scheme having been cancelled.
The future continues to look bright for Cyprus house prices, and it’s always bright for those who buy here!
