Residential Property Price Index recorded an increase of 0.5% in the second quarter of 2019, compared to the previous quarter and an increase of 2.8% on a yearly basis.
Apartment prices increased by 1.1% quarter on quarter and by 4.3% year over year, while house prices went up 0.3% on a quarterly base and by 2.3% YoY.
On a yearly basis, significant increases were observed in apartment prices in Larnaca (9.4%) and Limassol (7.2%), mainly in the coastal areas due to foreign demand.
“The Residential Property Price Index in Cyprus continues to grow, along with the recovery of various macroeconomic indicators and the wider economy,” the CBC notes, warning however that “there are uneven increases in specific areas but also downward risks, making it useful if not necessary to closely follow developments. ”
The CBC notes the that the continued decline in demand for real estate for the purposes of the Cyprus Investment Program may reduce or push real estate prices down in specific areas.
At the same time, the Central Bank points out the possible impact in real estate prices, if the large amount of properties held by Banks and Credit Aquaring Companies come onto the market.
It also notes that other any impact from external factors, such as Brexit, cannot be ruled out.
The Central Bank attributes that increase in apartment prices to insufficient supply in the market, not being able to meet the needs of the increased number of student and foreign workers who choose to live in apartments rather than houses.
At the same time CBC notes that demand due to Cyprus Investment Program declined after changing the program criteria in May 2019.