Surge in Vacation Home Prices and Rental Rates
The real estate market in Cyprus is witnessing a remarkable surge in vacation home prices and rental rates, signaling a robust rebound from COVID-19. Property experts have observed that the sale prices and rental rates for vacation properties have not only recovered but reached an eight-year peak, with some areas experiencing more than a doubling in rates.
In the bustling city of Limassol, rental rates for apartments and vacation homes have dramatically increased, as reported by Danos International Property Consultants and Valuers. The firm highlights an 80% hike in vacation apartment rates and a 60% rise in vacation home rates since 2016. The trend of escalating costs doesn’t stop at rentals; those looking to purchase holiday apartments are facing a 40% price increase, while houses have gone up by 20%.
The trajectory of rental rates and sale prices had been on an upward climb from 2016 until the pandemic-induced dip in 2020. However, Kyriacos Kiliaris, Chief Marketing Officer at Danos, shared with the Financial Mirror that the market began its upward momentum again in 2022, reaching record highs in the current year.
Larnaca is leading the charge with a 74% increase in holiday home rental rates since 2016. Kiliaris notes that many of these vacation homes double as permanent residences, reflecting the versatility and demand for such properties. Rental rates now range between €25 to €30 per square meter, influenced by factors such as age, location, and view.
Paphos follows closely behind Larnaca in terms of rental rate growth for holiday apartments and homes. Since 2019, average rents have risen by 24.5%, with current rates paralleling those in Larnaca. Limassol, known for its premium seaside holiday homes, has seen a 16.2% increase in rental rates since 2019, with the current rates stretching from €23 to €70 per square meter.
The scarcity of housing in Limassol has made holiday homes near amenities and business hubs highly sought after as permanent residences. This demand is reflected in the sale prices, which have soared by 20% since 2019, exceeding €4,000 per square meter. Similarly, Famagusta has experienced a 20% rise in sale prices since 2019, with high-standard properties fetching between €21 to €25 per square meter.
While Larnaca and Paphos also report increases in sale prices for holiday homes and apartments, Paphos presents potential investment opportunities due to its comparatively lower rent increase. The cost of purchasing a holiday home in Paphos has risen by about 15% since 2019, averaging around €3,000 per square meter.
As the real estate market continues to thrive post-pandemic, both investors and individuals seeking vacation homes in Cyprus are navigating a landscape marked by rising costs and high demand.
