Cyprus Real Estate Market: Warning of Supply Outpacing Demand

Real estate experts warn that high demand, coupled with limited supply and delays in bringing new projects to market, could lead to price increases. The Ministry’s report highlights steady growth in new property sales, with apartment sales far outpacing house sales.

According to the Department of Lands and Surveys, property sales in the first nine months of 2024 increased by 19.2% compared to the same period last year. From January to September, 5,253 residential property sales contracts were deposited; 4,335 for apartments and 918 for houses. This trend is seen in all districts, with the highest increases in areas with minimal foreign investor interest.

Apartments are in high demand

Apartment sales have surged by 30% nationwide, in contrast to a 9.2% drop in house sales compared to the same period in 2023. This shift, which is very popular with young people and families, is driven by housing costs and challenges in securing financing for larger down payments on homes.

Additionally, the geographic distribution of new purchases and the Ministry’s announcement indicate that many people in Nicosia have used housing assistance programs to buy apartments, especially in efforts to revitalize mountain, remote, and disadvantaged rural areas.

High demand outpacing supply

Speaking to Phileleftheros, the Chairman of the Property Valuers Association, Polys Kourousidis, said that these figures clearly reflect a high demand for housing and emphasized that this trend should serve as a warning for the future.

Strong demand is expected to continue next year, but supply has not kept pace. Delays in bringing new projects to market – largely due to bureaucracy in new District Administration Organizations, which began issuing permits in June 2024 – could lead to further price increases if demand continues to grow at its current rate.

Property buyer demographics

Mr. Kourousidis also provided insights on the buyer demographics:

• Nationwide, about half of the buyers are Cypriots and half are foreigners.
• In Nicosia, Cypriots make up 90% of buyers.
• Foreign buyers are particularly active in Larnaca and Paphos, where many Israeli buyers are involved, and to a lesser extent in Limassol.
• In Famagusta, transactions are fewer and mainly involve holiday homes.

Discussing the large increase in apartment purchases, Kourousidis said that these are mostly for owner-occupation, especially in Nicosia, where the typical two-bedroom apartment is priced between €220,000 and €230,000.

Analyzing the Department of Lands and Surveys data, Kourosidis concluded that 5,253 sales contracts were submitted in the first nine months of this year. This averages to 583 new property sales per month or about 145/district. Given an average of 22 working days per month, six properties were sold/day/district, which is a manageable level for the market. He added that if the volume of sales was higher, the market may face difficulties meeting the increased demand.

The table below, from the Interior Ministry’s website, shows the number of sales and their total values in each district in the first nine months of 2024 – and the percentage increase and decrease in the number of sales and values compared to the first nine months of 2023.