Prices are moving beyond traditional expectations

The upward trajectory of property prices in Cyprus in recent years, driven mainly by the rising cost of building materials and increased demand, is causing concern among experts, including Marinos Kinneiro, president of the Real Estate Agents Registration Board, who gave his thoughts on the matter.

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

The latest data from the Central Bank of Cyprus (CBK), relating to the first quarter of 2023, confirms Kineiro's observations. The house price index shows an increase of 7.7 percent compared to the same period of the previous year. Most notably, house prices increased by 6.6 percent year-on-year, while apartment prices increased by 8.4 percent. These increases are significant considering that, for example, an apartment costing €150,000 in the first quarter of 2022 is now selling for around €163,000, and similarly, a house costing €250,000 is now worth around €265,000.

For example, in'. 'Limassol, where prices were the highest, real estate sales reached almost 500 million euros for the second quarter of 2023, with most buyers interested in apartments priced between 100,000 and 500,000 euros. A total of 1,383 properties were sold during the period, worth €437.9 million. Limassol remains a key player in the Cyprusreal estate market, with apartments in the €100,000 to €500,000 range being particularly popular. In the capital, 553 apartments, 184 houses, 312 plots of land and 218 plots of land were sold in the second quarter of 2023. The value of apartments sold reached 99.7 million euros, houses 46.5 million euros, land 20.2 million euros and plots of land 38.6 million euros.

And moreover, according to the recent''published report, buyers in Nicosia are showing great interest in apartments priced between €100,000 and €200,000, with almost six out of ten apartments sold falling into this price range. In addition, four apartments were sold for more than €1 million in the Cypriot capital. More than half of the house sales in the Nicosia area (99 out of 184) were in the €100,000 to €300,000 price range. Two homes were sold at prices exceeding €1 million.

This trend is worrying, Kineiro noted, especially given the financial constraints faced by households in the real estate market, exacerbated by rising interest rates. At the same time, general inflation continues to erode the incomes of rental households, presenting significant challenges for''tenants.

Kineiro also emphasized the role of real estate agents, who often find themselves in the middle when negotiating between buyers, sellers and tenants. "In recent months, many colleagues have been the target of critical comments from prospective buyers and tenants," he explained. "It is important for people to understand that estate agents do not determine the prices of properties for sale or rent," he added.

Completing his analysis, Kineiro 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 have a negative impact on the entire sector and the wider economy. The Council on''s real estate agent registry, he said, "plans to strengthen efforts to raise awareness of roles and responsibilities in the real estate market, and to address these market dynamics. "