Cyprus property price rise: foreign buyers boost demand.

The Cyprusreal estate market rebounded in the first quarter of 2023 as property prices continued to rise rapidly, especially in the apartment segment, mainly due to increased demand.

A significant acceleration in the house price index (HPI) was seen compared to previous quarters, according to data released by the Central Bank of Cyprus (CBK) on Tuesday. The property sales and demand figures for the first quarter of 2023 confirm the upward trajectory of housing demand in the market.

In addition, property sales data from the Department of Land and Survey Records (DLS) showed a significant increase in housing demand compared to the previous year. Overseas buyers made a significant contribution''s annual growth rate, accounting for roughly half of the total number of buyers in 2022 and the first quarter of 2023.

The rate of growth in construction costs appears to be stabilizing compared to the 2021-2022 period, when significantly higher growth rates were recorded.

In the first quarter of 2023, the house price index (HPI) for the districts of Limassol and Larnaca experienced an acceleration, while in the Paphos district, despite a slight decelerating trend, the rate of property price growth remained high. The HPI recorded a quarterly increase of 2.1% in the first quarter of 2023, up from 1.6% in the previous quarter. The HPI growth was driven by a 2.3% increase in apartment prices and a 1.7% increase in house prices from the previous quarter. On an annualized basis''mortgage loans due to the monetary policy of the European Central Bank (ECB), the overall demand for real estate does not show a significant decline until the first quarter of 2023. This indicates that the Cypriot real estate market continues to show resilience and attractiveness to both domestic and foreign buyers.

The largest price increases were recorded in Limassol, Larnaca and Paphos. In the first quarter of 2023, house prices on a quarterly basis showed an increase in all areas. In particular, Nicosia recorded an increase of 1.3%, Limassol 2.9%, Larnaca 2.6%, Paphos 0.3% and Famagusta 2.3%. As for the year-on-year changes in house price indices for each district, recorded an increase in all districts for the sixth consecutive quarter. В''In particular, house prices in Nicosia rose by 4.3%, in Limassol by 10.6%, in Larnaca by 7.7%, in Paphos by 6.8% and in Famagusta by 4%.

The relatively high rate of house price growth in the Limassol, Larnaca and Paphos areas may be due to demand from foreign buyers due to the headquarters relocation policy encouraging companies to move their headquarters to Cyprus. In contrast, in the Famagusta area, the pace of property price growth has slowed in the last two quarters.

On a quarterly basis, house prices rose in all areas except Paphos. Specifically, Nicosia rose by 1.3%, Limassol by 2.8%, Larnaca by 2.2% and Famagusta by 2.9%, while Paphos posted a 1.1% decline. On a year-on-year basis, house prices rose in all areas.''Especially, Nicosia, Limassol, Larnaca, Paphos and Famagusta recorded increases of 4.2%, 9.4%, 5.8%, 5.7% and 5% respectively.

Apartment prices on a quarterly basis also continued to rise in all areas.

The sales of real estate to foreign buyers increased by a third. It should be noted that the number of documents o''Property sales continue to show an increase of 18.8% year-on-year, reaching 3,574 sales documents compared to 3,009 in the corresponding period last year. This reflects the increased demand for real estate. The number of properties sold to foreign buyers increased by 33.6% year-on-year (1,706 compared to 1,277), mainly from outside the European Union, during the quarter in question. In addition, the number of properties sold to domestic buyers increased by 7.9% year-on-year (1,868 compared to 1,732). The increase in the number of sale documents to foreign buyers is mainly due to the previously mentioned headquarters relocation policy, which attracts foreign''professionals from countries such as Russia, Israel, Ukraine, the UK, Lebanon and Belarus.

In addition, the limited supply of new immovable properties is reflected in the construction output index, particularly in the buildings category. The index is recorded and updated by the Cyprus Statistical Service (Cystat). After six consecutive quarters of annual decline in the index, a 5.5% annual increase was recorded for the first quarter of 2023. As for the number of residential buildings for which building permits have been approved, which is an early indicator of construction activity, a 6% annualized decline was recorded in the first quarter of 2023. This is the fifth consecutive quarter in which there has been a decline in the number of residential buildings for''which building permits are issued, indicating a perceived supply constraint and continued supply reduction in the future.