Central Bank of Cyprus: Residential Property Price Index Up 5% Year-on-Year in the Third Quarter

Asset Class Performance and Credit Expansion

Residential apartments outpaced detached houses by a substantial margin: recording annualized capital gains of 6.4% compared to 2.6% for single-family homes. On a quarterly basis, the aggregate composite index grew by 1.2%. Apartment valuations accelerated across nearly every district of the island, with Nicosia serving as the sole exception by sustaining unchanged growth rates. Detached houses in Nicosia registered their fourth consecutive quarter of price depreciation, while Famagusta similarly recorded a contraction in house prices.

The Central Bank observes that price appreciation mirrors underlying structural absorption alongside a distinct shift in buyer preferences toward compact configurations, driven by elevated construction costs. Demand fundamentals are further supported by improving retail mortgage conditions: total new residential housing loan volume expanded by 22% year-on-year, accompanied by a reduction in average mortgage interest rates down to 3.03%.

Construction Confidence and Regional Divergence

New supply introduction is steadily expanding: the aggregate number of issued building permits increased by 4.6%. The national construction confidence index has preserved its positive rating across eight consecutive quarters. This indicator confirms that development companies are structuring project releases with clarity, matching robust absorption and increasing interest in property for sale in Cyprus.

Regarding regional price movements, Limassol and Larnaca registered the most pronounced annualized capital appreciation at 7.1% and 7.3% respectively. In Paphos, price acceleration moderated to an annualized rate of 8.9%, whereas Nicosia and Famagusta recorded minor adjustments. Apartment price appreciation accelerated across virtually all territories, led by Larnaca and Paphos.