Cyprus has remained a stellar performer in recent years in the property market as real estate prices have held and even increased in value. But how does this Mediterranean island compare to other regions?
The Property Picture in Cyprus
One of the most reliable indicators, the RICS Cyprus Property Index with KPMG in Cyprus, showed that between April and June 2024, prices of both holiday apartments and holiday houses increased.
The quarterly report said apartment values increased an average of 3.29%, while holiday houses registered a 2.96% rise. On a district level, the only categories seeing increases are holiday houses in Paphos and holiday apartments in Famagusta.
Data from the Land Registry further revealed interest in Cyprus. It showed that property sales contracts confirmed in the first seven months of 2024 totalled 9,210—up 2% on the same period last year and the highest recorded since 2008.
On a district level, sales rose more than 20%, with Famagusta (36%), Limassol (29%), and Larnaca (28%) leading the way.
Lying in the island’s southern corner is Limassol, a thriving city, where real estate can begin at €200,000 for a two-bed apartment in the city centre and rise to €400,000 for private homes. At the luxury end, villas can fetch several millions of euros.
Further up the coast, Larnaca is a renowned holiday resort where property can range from an affordable €120,000 for a two-bed apartment and €200,000 for private homes, with luxury homes costing considerably more.
Comparisons In The Eurozone
Cyprus was already riding high on property sales, given that it was the highest performer in the Eurozone – and some – in 2023.
According to Eurostat, the EU statistical agency, Cyprus rose to the top of the EU’s housing market growth rankings in 2023, with a staggering 31% increase in home transactions. This compares favourably, given that 13 out of 16 countries in Europe recorded a decline.
In 2023, Cyprus was followed by Poland with a 3.9% rise and Ireland with a modest 0.6% increase. The most significant decreases in housing transactions in 2023 were in Luxembourg (-43.3%), Austria (-26.4%), and both Hungary and Finland (-24.5%).
In 2022, a similar trend was noted, with 10 out of the 16 reporting countries experiencing a decline in housing sales. Denmark had the steepest drop at -24.8%, while Cyprus again stood out with a 27.4% increase in transactions.
In The Med
Cyprus remains a solid choice for many investors from the Middle East, Africa, and Northern Europe, based on various factors, from the weather to regional conflicts.
Compared to other hotspots in the Mediterranean, it continues to perform favourably. For example, Spain’s island property market saw prices rise 8% and 6.5% on the coast. Average house prices rose 3.3% in May 2024. However, the average value of new and used housing in Spain is 17.8% below the 2007-2008 peak.
In Malta, property prices increased by 6.7% in the first quarter of 2024 compared to the same period in 2023.
Data sources from across the Med suggest that Montenegro, on the Southeast coast of Europe, is seeing a surge in property prices by more than 9% in 2023.
Equally, Greece, Cyprus’ erstwhile neighbour, is seeing a return to the investment real estate market. During the first half of last year, it recorded the biggest year-on-year house price increases in 20 years.
Global Property Outlook
On a broader scale, Cyprus continues to perform well on the global stage even if the global house price index rose by more than 3% year-on-year. House prices in the US are 6.5% higher than a year ago; they are up 5% in Australia and are soaring in Portugal compared to price falls of 20% in Canada, Germany and New Zealand.
Since 2021, average wages in the developed world have risen by around 15%, while unemployment remains close to a record low. In all countries, the rise in household employment income in recent years eclipses increases in interest costs. And any increase in housing demand will come up against limited supply.
Data suggests house prices are increasing or stabilising in most advanced nations, while others are experiencing slower falls.
Conclusion
With solid interest from across the world in the island nation, Cyprus is expected to have another fantastic year of growth in terms of investment potential, property values and economic development.
