Stability in prices, notable rise in apartment rents

Cypriot real estate market analytics firm Ask Wire on Friday released its Q2 2024 edition of the Ask Wire Index, detailing property sale and rental values across the island. The Index, which spans all districts and main property types with data from Q4 2009, offers an insightful snapshot of the current market dynamics.

On an annual basis, property prices across Cyprus saw notable changes: apartments increased by 3.5 per cent, offices by 1.0 per cent, and holiday apartments by 0.6 per cent.

However, prices for houses and warehouses remained stable, while commercial properties experienced a decrease of 0.6 per cent and holiday houses saw a slight dip of 0.2 per cent. Overall, on a quarterly basis, the market remained relatively stable, except for a minor decrease of 0.1 per cent in house prices. Notably, price stability was observed across all districts.

In terms of rental values, there were more pronounced shifts compared to Q2 2023. Apartment rents surged by 5.0 per cent, office rents rose by 3.2 per cent, and holiday apartments saw an increase of 2.5 per cent. House rents edged up by a modest 0.1 per cent, retail spaces by 0.8 per cent, and holiday houses by 0.3 per cent.

Conversely, warehouse rents decreased by 1.3 per cent. On a quarterly basis, rental values for apartments climbed by 1.5 per cent, while warehouses saw a slight decline of 0.2 per cent, with the rest of the property types remaining stable.

Quarterly percentage changes reveal that apartment prices remained unchanged, while rents increased by 1.5 per cent. House prices saw a slight decline of 0.1 per cent, with rents staying stable. Commercial properties, warehouses, office spaces, holiday apartments, and holiday houses all maintained stable prices, although warehouse rents dipped slightly by 0.2 per cent, and rents for other property types remained unchanged.

Looking at the annual percentage changes, apartment prices increased by 3.5 per cent, with rents rising by 5.0 per cent. House prices remained stable, while rents grew marginally by 0.1 per cent. Commercial property prices fell by 0.6 per cent, though rents rose by 0.8 per cent. Warehouse prices stayed the same, but rents decreased by 1.3 per cent. Office spaces saw price increases of 1.0 per cent and rental increases of 3.2 per cent. Holiday apartments experienced a price rise of 0.6 per cent, with rents up by 2.5 per cent. Holiday houses had a slight price decrease of 0.2 per cent, while rents increased by 0.3 per cent.

Pavlos Loizou, CEO of Ask Wire, commented on the factors influencing these trends. He noted that “persistent geopolitical risks and ongoing conflicts destabilise the construction supply chain, raising construction costs.”

Furthermore, he added, “sustained high interest rates further impact the affordability and demand for residential properties, especially in the middle to lower market segments. These factors, coupled with regional unrest, continue to influence overseas real estate demand, accelerating price impacts.”

“High mortgage rates are likely to persist, reducing locals’ buying power and stabilising market prices as demand adjusts. Moving into the third quarter of 2024 and beyond, we anticipate a slowdown in property prices for opportunistic investments. The convergence of high interest rates, elevated construction costs, and regional unrest is expected to significantly affect market stability and shape long-term investment decisions”, he concluded.