Across Cyprus, on a quarterly basis, sale values increased by 0.9% for apartments, and decreased by 1.1% for houses, 1.4% for commercial properties, and 1.5% for warehouses and offices.
Sale values of holiday apartments and holiday houses increased by 0.3% and decreased by 1.7%, respectively.
Nicosia stands out from the districts, as sale values of houses continued to rise for the fourth quarter in a row (1.1%).
On an annual basis, prices island-wide increased by 0.7% for apartments, 0.1% for houses and 0.5% for holiday apartments, and decreased by 4.1% for retail properties, 3.8% for warehouses, 2.0% for offices and 4.3% for holiday houses.
On a quarterly basis rental values increased by 1.1% for apartments and 1.3% for houses, and decreased 1.1% for retail properties, 1.4% for warehouses and 2.5% for offices.
Rental values of holiday apartments and holiday houses increased by 0.3% and 1.0%, respectively.
Paphos stands out from the districts, as rental values of retail properties continued to drop for the fourth quarter in a row (5.3%).
On an annual basis, rental values island-wide increased by 0.2% for apartments, 1.2% for houses, and 0.3% for holiday apartments, and decreased by 6.9% for retail properties, 2.3% for warehouses, 4.8% for offices and 4.8% for holiday houses.
the economic slowdown has had a significant impact on commercial properties, retail and offices, affecting particularly small and medium sized enterprises who rely on overseas demand/ visitors or are linked with the tourism industry.
In contrast, demand for residential properties, spurred-on by lower interest rates, low deposit rates, and a lack of investment options has resulted in significant investments taking place by locals.
Whilst transaction volume has recovered strongly and prices for selected property types are seeing an uplift, we are still miles away from seeing a return to stability as the economy is reliant on tourism and the impact on the banking sector is yet to unfold.
Nicosia driving slow real estate market
Nicosia is driving the Real Estate market with total property sales in the capital in the first nine months of 2021, exceeding that recorded pre-coronavirus pandemic.
Sales in the capital increased by a whopping 37% in the first nine months compared to the same period in coronavirus stricken 2020, and 38% more than the same period in pre-COVID 2019.
Despite an overall 9% decrease of Cyprus property sales from January to September, compared to 2019, Nicosia pulled in a remarkable increase, being the only district to do so.
According to Land Registry data, the number of sales documents submitted totalled 7003 from January – September, up from 5444 in the same period last year and down from 7736 in the nine months of 2019.
In the first nine months of 2020, the overall activity in the real estate market increased by 29% from last year.
Part of this increase is attributed to last year’s low base due to lockdowns that significantly reduced economic activity and the operation of the land registry itself.
Real Estate sales rose in all other districts; however, compared to 2019, sales decreased in all districts except Nicosia.
The biggest drop of 40% was in Paphos, while a decrease of 18% was seen in Limassol.
As the Central Bank pointed out in its latest real estate price report, the property market has been going through a period of adjustment since the beginning of the pandemic.
It attributed this to a possible shift of buyer and investor preferences to smaller apartments or houses of lesser value than previous years.
According to the Central Bank, there is increased demand for residential property in most districts, mainly for apartments and houses of smaller size and value than in the past.
On an annual basis, there is a stabilisation in house prices with an increase of 0.9% in the first quarter of 2021 from 0.8% in the fourth quarter of 2020.
In 2020, sales documents fell to their lowest point since 2016 at 7,968 units compared to 10,366 in 2019, recording an annual decrease of 23.1%.
Cyprus bucks EU trend for rising rents
Cyprus and Greece are the only two EU countries where the cost of renting a flat or a house has decreased over the past decade, according to the latest data released.
Rents decreased in only two countries between 2010 and 2021: Greece (-25%) and Cyprus (-3%).
The highest rises were recorded in Estonia (142%), Lithuania (109%) and Ireland (66%).
Cyprus has also seen the third largest reduction in house values overall compared to 2010, as prices decreased by 8%.
House prices decreased in four countries: Greece (-28%), Italy (-13%), Cyprus (-8%) and Spain (-3%).
The highest rises were recorded in Estonia (133%), Luxembourg (111%) and Hungary (109%).
In its analysis of the data, points out that between 2010 and Q2 2011, house prices and rents in the EU followed similar paths, but since Q2 2011, those paths have diverged significantly.
After a sharp decline between Q2 2011 and Q1 2013, house prices remained more or less stable between 2013 and 2014.
Then, there was a rapid rise in early 2015, when house prices have increased faster than rents.
From 2010 to Q2 2021, house prices jumped by 34%, and rents increased by 16%.
Rents and house prices in the EU continued their steady increase in Q2 2021, going up by 1.3% and 7.3%, respectively, compared to Q2 2020.
More specifically, while rents increased steadily throughout the period up to Q2 2021, house prices have fluctuated considerably.
Finally, when comparing Q2 2021 with 2010, house prices increased more than rents in 18 EU Member States.