Cyprus and Greece Real Estate Market
Cyprus and Greece Real Estate Market Overview
Cyprus Real Estate Market
- Transaction Value and Volume: In 2023, Cyprus's real estate transactions reached approximately €5.5 billion, maintaining the record-high levels of the previous year. This stability is attributed to robust demand in the residential sector, particularly from foreign buyers.
- Property Prices: The Residential Property Price Index (RPPI) increased by 7.7% in 2023 and 4.9% in 2024. Apartment prices saw significant growth, with increases of 10.7% in 2023 and 8.4% in 2024. House prices also rose, albeit at a slower pace, with increases of 5.7% in 2023 and 3% in 2024.
- Rental Yields: As of the second quarter of 2024, gross rental yields averaged 5.43% for apartments and 3% for houses. Rental values increased year-on-year by 5.48% for apartments and 5.61% for houses, indicating a strong rental market.
Greece Real Estate Market
- Property Values: Between 2017 and 2024, Greece's real estate market experienced periods of growth, notably an 11.2% increase in residential property values in 2021, driven by post-pandemic recovery and heightened demand for vacation homes and investment properties. As of November 2024, the average residential property value is approximately $292,700, with projections estimating a rise to around $364,500 by 2029.
- Regional Variations: In Athens, the average house price in the southern suburbs reached €3,750 per square meter in the first quarter of 2024, the highest nationwide. Piraeus experienced the most significant annual increase at 28.9%.
- Government Policies: To address housing shortages exacerbated by the proliferation of short-term rentals, the Greek government announced a three-year tax break for homeowners converting short-term rentals to long-term leases. Additionally, a ban on new short-term rental licenses in central Athens is set to take effect on January 1, 2025, for at least one year.
Vacation Rentals
- Cyprus: The post-pandemic recovery of the tourism sector has led to increased demand for vacation properties. Vacation apartment prices rose by 7.77%, and house prices by 6.63% over the past year. Rental rates for vacation apartments increased by 15.77%, and for houses by 7.66%.
- Greece: The Athens Riviera, a 60 km coastline from Piraeus to Sounio, is undergoing significant revitalization, evolving into a desirable real estate destination for both local and international investors. This rejuvenation includes the development of five-star hotels, the Riviera Tower, Greece's tallest skyscraper, and The Ellinikon, touted as Europe's largest real estate project.
In summary, both Cyprus and Greece's real estate markets are characterized by rising property values and rental rates, driven by strong demand, particularly from foreign investors. Government interventions, especially in Greece, aim to balance the benefits of tourism with the housing needs of local residents.