Property values have recovered to levels last seen before the economic crisis of 2013, after the leap observed in recent years, while apartment prices recorded their highest point based on the historical data of the Central Bank of Cyprus.
The housing price index for the third quarter of 2023 is at 91.4 units, up from 89.4 units in the second quarter of 2023, approaching the 2012 level of 91.2 units, with the highest point recorded in the third quarter of 2008 at 107.3 units.
Essentially, the property price index has recovered a large portion of the losses incurred during the fiscal and banking crisis and is now up by 24.5% from the low recorded in 2006.
The economic crisis that erupted after 2013 in Cyprus led to property price reductions, and the housing price index reached 77.8 units in 2014, decreasing to 74.4 and 73.4 units in 2013 and 2015, respectively.
The stagnation in the supply of new homes, the improvement of certain income categories, but mainly the increased demand from abroad, led to a significant price increase, resulting, among other things, in a significant revival of construction activity, which, however, does not seem to satisfy the existing demand.
Nevertheless, the significant increase in the price of new properties is largely contributed by the revaluation of building materials that raise construction costs, combined with increased demand from both domestic and foreign buyers.
The apartment price index for the entire country, compiled by the Central Bank and based on a reference of 100 for the third quarter of 2023, had risen to 103.9 units from 100.3 units in the second quarter of 2023, reaching levels seen in the first quarter of 2010, which were 100 units.
Subsequently, from the second quarter of 2010, it began to decrease and “collapsed” to 70.7 units in the first quarter of 2016, which was also the lowest point for apartments.
As indicated by the Central Bank’s data at the end of 2021, the index had risen to 85.9 units, maintaining a significant distance from the record, but at the end of 2022, it had risen to 97.3 units, and at the end of the third quarter, it had reached 103.9 units.
If these rates of apartment price increase are maintained, by 2024, the market will complete a 16-year cycle and return to the record level of 2008.
The dynamics in apartment prices vary in each region.
The price index in Limassol for the third quarter of 2023, according to the Central Bank’s index, was 125.3 units, up from 120.5 units in the second quarter, the highest index based on available data.
The apartment price index in Limassol has shown a steady upward trend since 2019. On the contrary, a decline in the index was recorded in 2014 at 74.9 units, down from 82.8 units in 2013, 74 units in 2015, 74.6 units in 2016, and 78.6 units in 2017.
From 2018, the apartment price index in Limassol gradually increased to reach a three-digit number in the second quarter of 2023 and continued in the third quarter of 2023.
In the Nicosia region, the apartment price index for the third quarter was 92.5 units, and the second quarter of 2023 was 91.1 units.
In Larnaca, the apartment price index for the third quarter was 92.5 units, and the second quarter of 2023 was 89.8 units.
In Paphos, it was 95 units in the third quarter, up from 90.3 units in the second quarter of 2023, and it has returned to levels seen in 2010.
In the Famagusta region, the apartment price index declined to 71.7 units in the third quarter from 72.9 units in the second quarter of 2023 and is at levels seen in 2013.
For houses, the price index for the third quarter is 85.6 units, and the second quarter of 2023 was 84.5 units, slightly below the levels of 2013, which were 86.1 units, while the highest point was in the third quarter of 2008 at 108.9 units.
In Limassol, the house price index is at 93.6 units for the third quarter, up from 92.3 units in the second quarter, and it is the highest recorded compared to other regions.
The house price index in Limassol is slightly below the levels of 2012, which were at 94.1 units. In the Nicosia region, the house price index for the third quarter is 80.2 units, while the second quarter was 79.9 units. It is slightly above the levels of 2014 at 79.8 units, one year after the bubble burst. The highest point was recorded in the second quarter of 2008 at 103.5 units.
In the Larnaca region, the house price index for the third quarter was 80.1 units, and the second quarter of 2023 was 78.2 units. The index is slightly below the levels of 2013 when the index was at 82.1 units.
In Paphos, the house price index was 89 units in the third quarter, up from 88.1 units in the second quarter of 2023, and it is higher than the levels of 2013 at 86.7 units.
In Famagusta, the house price index increased to 86.1 units in the third quarter from 82.5 units in the second quarter of 2023 and is above the levels of 2013.