Inflation continues to persist in Cyprus’ cornerstone agricultural and housing markets despite reports of anticipated economic growth for 2024. Recent Eurostat data reveals that Cyprus is among the seven Mediterranean EU countries witnessing rising prices of agricultural products with an increase of 11%. This increase is partly attributed to last summer’s high temperatures and heavily impacted by Cyprus’ close ties with the Greek market.
Additionally, the Central Bank (CBC) reports a surge in house prices by 7.4% in the third quarter of the year. This rise is more pronounced in apartment prices which recorded an increase of 11.5%, rendering apartments less affordable for the average citizen. The CBC attributes this rise primarily to increased demand from both domestic and international investors.
However, despite the increased demand, the CBC observes a decrease in approved building permits for residential buildings between January and August 2023 as compared to the same period in the previous year. This reduction is largely due to the increased cost of construction and borrowing. Moreover, the CBC data identifies a notable 20% annual decrease in granted loans for housing in 2023, leaving fewer estates purchasable and more “privileged” people in the market.
As Cyprus heads into 2024, amid fears of geopolitical instability and rising prices in basic needs sectors, continuous modernisation and reform in its agricultural and housing policies are imperative. Regulations pushing both properties into the market and protecting agricultural land are crucial for easing the strain in the economy and for the country’s long-term welfare.
