The increase of residential property prices remains moderate the Central Bank of Cyprus (CBC) has said as the residential property price index in the second quarter of 2018 marked eight consecutive quarters of growth.
In the second quarter of 2018, the residential property price index, compiled by the CBC (houses and apartments) rose by 0.3% with the index of house and apartments rising by 0.2% and 0.7% on a quarterly basis.
On an annual basis the residential property index rose by 1.7% in the second quarter of 2018.
Prices in all districts rose with the exception of Paphos which registered a marginal reduction of 0.2%
“The real estate sector in Cyprus follows a positive course. The prices show increase which are however moderate except from certain areas,” the CBC said.
The CBC says that residential property prices in Limassol especially in apartments showed significant increase for five consecutive quarter notably in the coastal areas where price growth is the largest compared with all other areas of Cyprus.
The CBC attributes this significant rise to the fact that Limassol is the most densely populated district in Cyprus, the operation of the Cyprus University of Technology in the city centre, demand for apartments from Airbnb, the construction of the marina and the decision of the government to operate the island’s main casino in the city.
The CBC also said price increase in Limassol are affected by the purchases of residential property by foreigners in the context of the Citizenship by Investment Scheme, noting however that these purchases are not financed by the banking system and are not factored in in the CBC residential property index.
Furthermore, the CBC warned over a possible rise in supply of mainly commercial real estate due to the reform in the legal framework governing foreclosures, insolvency, loan sale and the approval of the law on loan securitisation which may lead to the reduction of non-performing loans in Cyprus but may lead to an increase in supply or real estate property.