Prices in Cyprus recovering but sales up mostly in areas popular with overseas buyers

The recovery in the residential property market in Cyprus appears well underway with house prices up 1.7% and apartments up 0.7% in the final quarter of 2016, the latest analysis report shows.

The biggest increase on the Mediterranean island was a rise of 3.3% for apartments in Larnaca and an increase of 1.8% for houses in Limassol, according to the Cyprus property index published by the Royal Institution of Chartered Surveyors which is based on methodology produced by the University of Reading in the UK.

The data also shows that prices of holiday homes are also improving, with apartments up by 2.3% and houses up by 2.2%.

The report points out that during the fourth quarter of 2016 the Cyprus economy showed further signs of stability, with a seasonally adjusted quarterly GDP growth of 0.7% and an annual seasonally adjusted GDP growth of 2.9%.

It also points out that given prevailing economic conditions and the marginally improved confidence in the Cyprus’ banking system, there were relatively higher transactions during the quarter.

The result is that the property price index has recorded increases in almost all cities with significant increases being recorded in Larnaca, Limassol and Nicosia, whilst other cities are progressively bottoming out.

Rents are also rising. Across Cyprus, on a quarterly basis, rental values increased by 1.8% for apartments and 2.9% for houses and year on year they were up by 6.6% and 8.7% respectively. At the end of 2016 average gross yields stood at 4% for apartments and 2.1% for houses.

However, separate data from the Department of Lands and Surveys suggests that activity is more up and down. Sales were down 2% in April 2017 compared to the same month in 2016. But sales increased by 27% in Paphos and by 16% in Limassol. They were up just 1% in Nicosia and fell by 46% in Larnaca and by 17% in Famagusta.

The official figures for the first four months of 2017 shows that sales were up 7% year on year with Paphos recording a rise of 22%, Limassol a rise of 16% and Nicosia a rise of 3%. But over the same period sales fell by 13% in Famagusta and by 12% in Larnaca.

It is a similar picture for sales to overseas buyers, up in locations popular with international property investors, up by 36% in Paphos, by 26% in Limassol and by 25% in Famagusta but down by 3% in Nicosia and by 1% in Larnaca.