Real Estate Market in Cyprus a Bubble about to Burst?
With the current pace of price increases, everyone wonders when this will come to an end.
When will this real estate bubble finally erupt and send the prices crashing back down?
Or will it?
The Central Bank believes otherwise.
It has been stated that a possible reduction in prices is always a concern for the banking sector, in today’s conditions a price reduction is very highly unlikely to occur.
They also stated that “It is improbable that real estate prices will decline, mainly due to the increase in construction materials but also increased demand mainly from Cypriots, who prefer apartments, due to the good yields offered by rents,”
This is due to the pressure from inflation causing construction costs to rise by up to 20% as well as the incredible increase in sales also squeezing the prices up.
Also, during our lockdowns of the pandemic the real estate market held remarkably well due to fiscal measures taken by the government.
It has even been stated that properties are priced below their potential value.
The Central Bank also stated that:
“The fact that household home lending criteria, according to the Central Bank’s most recent Bank Lending Survey, has remained unchanged in the fourth quarter of 2021, following a continued tightening of criteria from Q2 2020 to Q3 2021, largely ensures that new mortgage lending will remain sustainable”
These points all show us that the market is not going to slow down or “crash” any time soon.
Big changes in price are not expected to happen within the rest of 2022.
2023 will be a different story.
I would like to give credit to the Editorial of Cyprus Property News for inspiring this blog post:
Central Bank Dispels Property Bubble Fears
