The Central Bank of Cyprus has published its latest housing market report, revealing that residential property prices rose at their slowest pace in the last ten quarters during Q4 2024. Despite ongoing interest in real estate, the market is showing signs of stabilization—an important shift that could benefit investors looking to enter under more balanced conditions.
Growth Slows, but Demand Remains Resilient
The House Price Index, which includes both apartments and houses, rose by just 0.4% in Q4, compared to 0.9% in Q3 2024. On an annual basis, the increase stood at 4.5%, marking the lowest year-on-year growth since mid-2022.
Apartments and houses followed different trajectories:
- Apartments: +5.5% year-on-year (vs. 8.8% in Q3), +0.1% quarterly
- Houses: +4.6% year-on-year (vs. 6.0%), +0.5% quarterly
Regional Breakdown: Paphos Stands Out
Among Cyprus’ districts, Paphos was the only area where property prices accelerated significantly, with a remarkable 13.4% annual increase. House prices there rose by 14.7%, and apartment prices by 12.1%.
Elsewhere, growth slowed or stabilized:
- Nicosia: -0.4% (houses), +2.6% (apartments)
- Limassol: +5.1% (houses), +5.5% (apartments)
- Larnaca: +6.1% (houses), +8.7% (apartments)
- Famagusta: +7.8% (houses), +14.2% (apartments)
Sales Activity and Foreign Demand Remain Solid
According to the Department of Lands and Surveys, a total of 4,163 property sales contracts were signed in Q4, up 2.8% year-on-year.
- Domestic transactions: +3.2%
- Foreign transactions: +2.2%
Limassol led in transaction volume with 1,341 sales, followed by:
- Nicosia: 934
- Larnaca: 859
- Paphos: 825 (with foreign buyers accounting for 67%)
- Famagusta: 204
Paphos continues to attract a predominantly international clientele, underscoring its role as a premium investment destination.
Financing Conditions: Loan Activity Up, Rates Stabilizing
New housing loans rose 7.6% year-on-year, reaching €290.1 million, up from €269.6 million in Q4 2023. Despite high financing costs, the average mortgage interest rate dropped from 5.04% to 4.62%, though it remains above the five-year average.
The Central Bank's January 2025 Lending Survey indicates that lending criteria remain stable and demand for housing loans is unchanged.
Housing Supply Expands: Permits on the Rise
The market is also seeing a noticeable increase in supply. Between January and September 2024, 8,801 building permits were issued—up 10% compared to 7,999 during the same period in 2023.
Key contributing factors include:
- The June 2024 transfer of licensing authority to District Local Authorities
- A surge in apartment block development
Larnaca and Limassol recorded the sharpest increases in permit activity, indicating a potential boost in supply in the near term.
Outlook for Investors in 2025
Cyprus’ residential property market is entering a phase of moderated growth, opening up new windows of opportunity for investors:
- Slower price growth provides more favorable entry points
- Increased supply means more choice and stronger negotiating positions
- Steady demand, particularly from foreign buyers, supports long-term liquidity
- Stabilizing construction costs could keep new development prices in check