Rising prices and tensions for Cyprus real estate market in 2024

The president of the Cyprus Council for Registration of Real Estate Agents, Marinos Kyneyirou, outlined the difficulties facing the Cyprus real estate market in a recent analysis.

Kyneyirou predicts a challenging year marked by price reductions driven by the market, maybe offset by supply chain interruptions brought on by geopolitical conflicts.

Kyneyirou noted that the pandemic of 2020–2021 and the current circumstances in Ukraine continue to have an influence on the market. Interest rate increases by the European Central Bank and rising prices for construction materials added to the market's challenges in 2023.

Despite these hurdles, the real estate sector demonstrated resilience, with 8,681 property transfers totaling €1.4 billion and 9,374 sale agreements valued at €3.3 billion in the first nine months of 2023.

The president noted a concerning trend identified by Eurostat, indicating a decreasing percentage of Cypriots able to acquire their own homes. The rising cost of living, high property prices, and boosted loan costs contribute to this issue.

He emphasized the council's previous warnings regarding the impact of rising housing prices, leading to an increase in renting, particularly with property owners favoring short-term leases. He expressed concern about rental prices becoming unaffordable for many, exacerbating the accommodation crisis.

Kyneyirou projected some price reductions through offers and incentives for residential and apartment sales in 2024. The ongoing crisis in Ukraine and the events in Gaza, together with the possibility of the war spreading to Lebanon, have left uncertainty in their aftermath. The Cypriot economy is further challenged by supply chain disruptions, namely the impact of Houthi attacks in Yemen on the operation of the Suez Canal.

Kyneyirou came to the conclusion that prices for real estate, particularly newly constructed residences, may remain high in the upcoming year due to a possible increase in the cost of raw materials and construction supplies. The market is waiting to see how supply chain dynamics and global events will affect Cyprus' real estate market.