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Cyprus Housing Market Slows Amid Rising Costs and Regional Divergence

by THEFUTURE.TEAM
May 27, 2025

Overview: A Cooling Market

The latest data from the Central Bank of Cyprus confirms a notable deceleration in the nation’s housing market during the fourth quarter of 2024. Overall, the House Price Index (HPI), compiled collaboratively with member banks, reflects a slowdown in price growth, largely driven by persistently high construction costs and elevated borrowing rates.

Performance Breakdown: Quarterly and Annual Trends

Quarterly figures indicate a marginal uptick in housing prices of only 0.4 percent in Q4, a decrease from the 0.9 percent observed in Q3. When examining the market by property type, the apartment segment experienced a modest increase of just 0.1 percent, in contrast to a 0.5 percent rise for houses. On an annual basis, the overall market saw prices rise by 4.5 percent in Q4, a decline from the 6.5 percent growth recorded in the previous quarter.

Segment-Specific Insights

Digging deeper, apartment prices posted an annual increase of 5.5 percent, while house prices climbed by 4.6 percent. These figures underscore a broader market trend where indicators of slowing sales activity coincide with a growing inventory of properties available for sale or rent.

Regional Disparities: Paphos Leads, Nicosia Slips

Amid these mixed signals, regional performance varied significantly. Paphos emerged as the standout, registering a robust 13.4 percent annual increase in housing prices, the strongest growth rate in the country. In stark contrast, Nicosia recorded a marginal annual decline of 0.4 percent, marking it as the only district with negative performance. Other regions including Limassol and Famagusta also exhibited slowing annual growth at 5.1 percent and 7.8 percent respectively, while Larnaca maintained steadiness at 6.1 percent.

Market Outlook

According to the CBC’s quarterly real estate bulletin, the upward pressure on construction material costs and higher borrowing expenses remain key inhibitory factors to market expansion. The European Commission’s Economic Surveys for December 2024 further suggest that expectations for property price increases over the next three months will be subdued, reinforcing the narrative of a cooling market amid persistent financial headwinds.

Conclusion

In summary, the Cyprus housing market is undergoing a period of recalibration. While certain districts like Paphos continue to outperform, the overall slowdown, particularly in apartment segments and in key markets like Nicosia, reflects broader economic pressures. Investors and industry stakeholders will need to navigate these challenges as the market adjusts to a new normal under constrained borrowing conditions and volatile construction costs.

European Central Bank Report Highlights Stable Inflation and Economic Outlook

by THEFUTURE.TEAM
October 29, 2025

Overview Of Inflation Trends

The latest European Central Bank survey shows a slight decline in median inflation expectations over the next 12 months, decreasing from 2.8% in August to 2.7% in September. Despite this minor adjustment, consumer perceptions of past 12-month inflation have held steady at 3.1% for the eighth consecutive month. Long-term projections for three- and five-year inflation remain stable at 2.5% and 2.2% respectively.

Consumer Expectations Drive Income And Spending Projections

Across the board, expectations for nominal income growth over the upcoming year have remained consistent at 1.1%. However, there is a noticeable shift in spending behavior: while perceived nominal spending growth for the past year slipped slightly to 4.9% from 5.0%, expectations for spending growth over the next 12 months rose to 3.5%. Notably, lower income groups continue to forecast marginally higher spending increases compared to their higher income counterparts.

Stability In Economic And Labour Market Outlook

Economic growth expectations are modestly pessimistic, with respondents forecasting a contraction of -1.2% over the next 12 months. Concurrently, anticipated unemployment levels remain unchanged at 10.7% a year ahead, though the outlook varies by income, with lower income households expecting unemployment rates as high as 12.7%, while higher income groups maintain expectations around 9.4%. Overall, the slight difference between current and future unemployment suggests a broadly stable labor market outlook.

Housing Market And Credit Conditions

The survey also reveals an upswing in expectations related to the housing market. Home price growth expectations have edged higher to 3.5%, and anticipated mortgage interest rates have risen modestly to 4.6%. Similar to other metrics, expectations vary by income, with lower income households expecting higher mortgage rates. In recent months, a marginal decline in reported credit tightening over the past 12 months contrasts with a renewed forecast of tighter credit conditions in the forthcoming year.

Conclusion

The ECB’s latest findings underscore the delicate balance between stable long-term economic forecasts and short-term adjustments in consumer expectations. The slight dips in inflation expectations, alongside stable perceptions of past inflation, delineate a marketplace that is both cautious and measured. As income, spending, and housing market metrics continue to evolve, these indicators provide critical insights for policymakers and investors navigating an increasingly complex economic landscape.

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