Office and flat rents are on the rise, while warehouse rates are falling
Office rents are rising in Cyprus, as evidenced by the performance of the RICS Cyprus Real Estate Index. In Q4 2022, prices rose in almost all sectors, but the most pronounced increase was in office space and flats.
Flats rose by almost 12% and offices by more than 9% during this period. The price of houses went up by 8.9%. However, the situation in the market varies from region to region. If Nicosia most actively increased the prices of flats, in Paphos, the priority belongs to office properties and houses. As for warehousing properties, the appreciation of their value is observed only in two regions. In Larnaca, the dynamics in the segment of commercial properties decreased, while in Limassol, they increased, but only slightly.
In the leisure sector, the prices of flats increased by 8.3%, while holiday homes showed a price increase of about 9.5%. The latter went up most in Larnaca, while in Famagusta, apartment costs increased.
As for rents, apartments and flats remain in demand, while the dynamics of warehouses and commercial premises have slowed down somewhat. Experts also note minimal growth in rental yields for office properties, while this figure has declined for warehouses.
Office and flat rents in Larnaca
Larnaca is popular with foreign buyers and renters. Although the city has less infrastructure than Limassol, it attracts relatively low housing prices. As of 2022, long-term rents for a one-bedroom flat here were €540-1200 per month, while on the outskirts, it was possible to find an option for €450 per month. Apartments with three rooms in central areas of Larnaca cost 1500-3000 euros per month, and in the remote areas – from 1200 euros.
Property prices in the city are more favorable than in other regions. A square meter of new housing will cost 1650-2200 euros, while the same object in Limassol will cost twice as much.
Analysts cite stability in the country as one of the main reasons for the strong growth in property prices. Although 2023 is predicted to slow economic development, the growth dynamics of the cost of objects will remain. According to experts, the demand for quality local housing will actively grow, leading to increased property prices. The market may slow down due to the impact of inflation and rising interest rates. However, the role of these factors in the sector is still insignificant.