Further recovery in the Cyprus economy is helping to boost the Mediterranean island’s property market, with real estate prices continuing to rise.
The latest quarterly index from the Royal Institution of Chartered Surveyors (RICS) covering the second quarter of 2018 shows the improving Cyprus economy has led to house prices rising by 2.1 per cent and apartments by 1.3 per cent on a quarter-to-quarter basis.
House prices rose strongest in Larnaca, boosted by 6.7 per cent on a quarterly basis.
Values for holiday homes on a quarterly basis increased across the islands as the Cyprus economy improved, with apartments up 2.8 per cent and houses up 1.5 per cent. The biggest increase in this sector was a rise of 7 per cent for apartments and houses again in Larnaca.
Year-on-year prices for apartments increased nationally by 7.6 per cent while house prices were up on an annual basis by 4.8 per cent, offices up by 11.6 per cent, warehouses by 4.2 per cent and retail by 1.7 per cent.
The report shoes that during the second quarter of 2018 the Cyprus economy showed further signs of recovery, with a seasonally adjusted quarterly GDP growth of 0.8 per cent and an annual seasonally adjusted GDP growth of 3.9 per cent.
Further evidence of a strengthening Cyprus economy was unemployment dropping significantly to 7.3 per cent from 10.6 per cent a year ago and from the record high of 17.6 per cent in the first quarter of 2015 while an improved confidence in the Cyprus banking system and the improved availability of finance have led to relatively higher transaction volumes, which further enhanced market sentiment.
The stronger Cyprus economy has also led to rental value growth, whereby rents have increased on a quarterly basis by 2.9 per cent for apartments, 3.9 per cent for houses, 1 per cent for retail, 1 per cent for offices and 0.4 per cent for warehouses.
On an annual basis, rents increased by 18.0 per cent for apartments, 17.7 per cent for houses, 3.8 per cent for retail, 14.3 per cent for offices and for warehouses 1.9 per cent.
In a boost for overseas property investors, the Cyprus economy growth has led to proportionately higher quarterly rental increases compared to quarterly price increases, therefore marginally improving yields for apartments and offices.