Filenews 15 January 2024
Real estate prices have returned to 2012 levels, just before the banking crisis, after jumping in recent years, while the apartment price index records its highest point based on historical data from the Central Bank.
The housing market is now rapidly catching up to the highs reached 11 years ago, although it was not the highest on record. The house price index in the third quarter of 2023 is at 91.4 points from 89.4 points in the second quarter of 2023, reaching close to the level of 2012 which was 91.2 points, while the highest point was recorded in the third quarter of 2008 at 107.3 points.
In fact, the real estate price index has recovered much of the losses it suffered during the fiscal and banking crisis and is up 24.5% from the low recorded in 2006.
The economic crisis that broke out after 2013 in Cyprus led real estate prices to decreases and the house price index in 2014 fell to 77.8 points, in 2014 and 2013 it fell to 74.4 points and 73.4 points respectively. The stagnation of the supply of new homes and the improvement of certain income categories, but mainly the increase in demand from abroad, led to a very large increase in prices, resulting, among other things, in a significant resurgence of building activity, which, however, does not seem to satisfy existing demand. However, the sharp rise in the price of new properties is greatly contributed by the appreciation of building raw materials that increase construction costs in combination with increased demand coming from both domestic and foreign buyers.
It is characteristic that the apartment price index for the whole country, compiled by the Central Bank and based on 100 for the third quarter of 2023, had risen to 103.9 points from 100.3 points in the second quarter of 2023, reaching the levels of the first quarter of 2010 which were 100 points.
Then, from the second quarter of 2010, it began to decline and "collapsed" to 70.7 units in the first quarter of 2016, which was the lowest point for apartments. As can be seen from the Central Bank's data, at the end of 2021 the index had risen to 85.9 points, still maintaining quite a significant distance from the record, but at the end of 2022 it had risen to 97.3 points and at the end of the third quarter, it had risen to 103.9 points. If these rates of increase in apartment prices are maintained, in 2024 the market will close a 16-year cycle and will have returned to the record level of 2008.
Apartments
The dynamics in apartment prices are different in each province. The price index in Limassol in the third quarter of 2023, according to the Central Bank index, was at 125.3 points from 120.5 points in the second quarter, the highest index based on available data. The apartment price index in Limassol shows a steady upward trend from 2019 onwards. On the contrary, the index declined in 2014 to 74.9 points from 82.8 points in 2013, in 2015 when it was 74 points, in 2016 it was 74.6 points and in 2017 to 78.6 points. Since 2018, the apartment price index in Limassol has been gradually increasing to reach triple digits in the second quarter of 2023 and continue in the third quarter of 2023. In Nicosia district, the apartment price index in the third quarter was 92.5 units and in the second quarter of 2023 it was 91.1 points.
According to the data, it is still far from 100 units in 2010 based on available data. In Larnaca the apartment price index in the third quarter was at 92.5 units and in the second quarter of 2023 it was 89.8 points, in Paphos it was at 95 units in the third quarter from 90.3 units in the second quarter and has returned close to 2010 levels. In Famagusta district, the apartment price index fell in the third quarter to 71.7 points from 72.9 points in the second quarter of 2023 and is at 2013 levels.
Where do house prices go by province?
In homes, the price index in the third quarter is at 85.6 units and in the second quarter of 2023 it was 84.5 points and is slightly below the levels of 2013 which were 86.1 points, while the highest point was in the third quarter of 2008 at 108.9 points. In Limassol the price index stands at 93.6 units in the third quarter from 92.3 units in the second quarter and is the highest recorded compared to the other districts.
The house price index in Limassol is slightly below the 2012 levels of 94.1 points. In the Nicosia district, the house price index stands at 80.2 points in the third quarter, while in the second quarter it was at 79.9 points. It is just above 2014 levels of 79.8 points, a year after the bubble burst. The highest point was recorded in the second quarter of 2008 at 103.5 points.
In the district of Larnaka, the house price index in the third quarter was 80.1 units and in the second quarter of 2023 it was 78.2 points. The index is just below 2013 levels when the price index stood at 82.1 points. In Paphos, the house price index stood at 89 units in the third quarter from 88.1 points in the second quarter of 2023 and is above the 2013 levels of 86.7 points. In Famagusta, the house price index increased to 86.1 points in the third quarter from 82.5 points in the second quarter of 2023 and is above 2013 levels.
