RICS: Property prices increased across all asset classes in Q2

Property prices increased across all asset classes in the second quarter of the year, both compared with Q1 and the same period last year.

According to the RICS Cyprus Property Index with KPMG in Cyprus, a quarterly publication tracking property and rental prices across all Cyprus districts and main property types, during 2023Q2, a further increase was recorded in the prices of residential properties, with Apartments leading slightly ahead of Houses. Offices and Warehouses also recorded marginal gains whilst, in contrast, Retail prices continued to be relatively stagnant.

A year-on-year (YoY) comparison reveals increases in all asset classes, with the largest evident in Apartments (12.11%), followed by Houses and Offices (9.03% and 8.46% respectively). Warehouses (6.95%) and Retail (1.57%) exhibited the lowest increases.

The quarter-on-quarter (QoQ) data on residential properties posting the largest gains showed that Larnaca appeared to be the most buoyant market with prices increasing by 8.55%, while Nicosia (1.78%) and Famagusta (0.76%) were the most subdued.

The strong performance of Apartments and Houses is particularly visible in Larnaca (house prices rose by 5.32%) and Paphos, where apartment prices rose 4.18% and house prices 4.06%. Warehouses recorded significant increases in Limassol and Larnaca, but a small drop in Paphos, whilst Offices recorded marginal increases. Retail shows marginal increases in all districts and a drop in Paphos (-0.78%).

Holiday assets (Apartments & Houses) continued their upward trend in values, with Holiday Apartments consistently exhibiting a higher increase than Holiday Houses.

On a YoY comparison, both categories experienced growth with Holiday Apartments leading the way with a 9.00% increase, and Holiday Homes recording an 8.53% increase.

On behalf of KPMG in Cyprus, Christophoros Anayiotos, Head of Real Estate Industry Group, stated:

“The upward trend in Cyprus Property Index continued during the second quarter of 2023, with Larnaca recording significant overall increases. The best performing asset class is Apartments, followed closely by Houses, with the highest increases being recorded in Larnaca and Paphos. Warehouses and Offices recorded modest increases, with the best performers being Larnaca for Warehouses and Limassol for Offices. Retail displayed marginal increases, while recording a drop in Paphos. Rental values also increased, with holiday apartments and residential sector properties (apartments, houses) exhibiting the largest increases. Overall, the Cyprus Property Index shows very positive returns for the residential sector and the holiday properties, which seem to be driven by resilient demand”.

On behalf of RICS, Simon Rubinsohn, RICS Chief Economist, commented:

“Economic numbers remain firm providing a solid backdrop to the real estate market. Meanwhile, inflation pressures appear to be easing even if the core measure is exhibiting a degree of stickiness. This helps to explain why feedback for Cyprus as part of the RICS Global Commercial Property Monitor (GCPM) shows that sentiment is still positive. Significantly, this is reflected in the latest Cyprus Property Price Index and forward looking indicators from the GCPM suggest that the upbeat trend is likely to persist through the second half of this year and into 2024.”

The publications can be found on the RICS website https://www.rics.org/news-insights/market-surveys/cyprus-property-price-index