Property prices in Cyprus rise above traditional expectations

In recent years, property prices in Cyprus have continued to rise, causing concern among experts, including Marinos Mineiro, president of the Real Estate Agents Registration Board, who expressed his thoughts on the matter.

"We have noticed recently that many property owners, land developers and individuals are looking for unnaturally high prices for the sale and rental of their properties," said Kineiro. He added that based on years of experience in the Cypriot real estate market, "we can determine when prices are within reasonable limits and when they deviate from the norm." "There are currently prices that are not in line with the traditional and logical parameters of the Cypriot real estate market," he explained.

According to recent data from the Central Bank of Cyprus (CBK) relating to the first quarter of 2023, there has been a 7.7 percent increase in the property price index compared to the same period of the previous year. Home prices rose especially, up 6.6 percent, and apartment prices rose 8.4 percent. These increases are significant given that, for example, an apartment costing €150,000 in the first quarter of 2022 now sells for around €163,000, and similarly, a house costing €250,000 now costs around €265,000.

For example, in Limassol, where property prices were the highest, sales volume amounted to almost €500 million in the second quarter of 2023, with most buyers interested in apartments priced between €100,000 and €500,000. During this time, 1,383 properties were sold for €437.9 million. Limassol remains a key player in the Cyprus real estate market, with apartments in the €100,000 to €500,000 range being particularly popular. In the capital city, 553 apartments, 184 houses, 312 plots of land and 218 plots of land were sold for construction in the second quarter of 2023. The value of apartments sold amounted to 99.7 million euros, houses to 46.5 million euros, land to 20.2 million euros and building plots to 38.6 million euros. Nicosia accounted for 29.5 percent of total apartment sales nationwide.

Kineiro said that this trend is worrying, especially in the context of financial constraints of households in the real estate market, exacerbated by rising interest rates. At the same time, general inflation continues to reduce the incomes of renting households, presenting them with significant challenges. Chineiro also emphasized the role of real estate agents, who often find themselves mediating negotiations between buyers, sellers and tenants.

"In recent months, many colleagues have faced critical comments from potential buyers and tenants," he explained. "It is important that people understand that real estate agents do not set the prices for the sale or rental of properties," he added.

Closing his analysis, Kinheiro emphasized that although real estate agents do not set property prices, excessive price increases are a significant problem that cannot be left unchecked as they can be detrimental to the entire sector and the wider economy. The Real Estate Agent Registration Board, he said, "is working to raise awareness of roles and responsibilities in the real estate market and address these market dynamics. "