First-time homebuyers are increasingly approaching 40 years of age, shifting from the traditional 25-35 age bracket, according to property consultants Danos International.
The government has acknowledged this trend by extending the age limit for housing support schemes to 41 years.
Nationwide apartment sales have increased by 30 per cent, whilst house sales declined by 9.2 per cent in the first nine months of 2023, reflecting younger families’ growing preference for flats amidst rising housing costs and lending difficulties.
Despite Danos reporting a slight price decrease of about 1 per cent over the last two quarters, year-on-year prices continue to rise.
Currently, a 200-square-metre house in an average suburban area costs approximately €400,000, requiring a €100,000 deposit and €300,000 mortgage.
Ministry of Labour data shows average gross monthly salaries of €2,200 for men and €1,800 for women. However, young households aged 25-35 typically earn a combined monthly income of around €3,000. With Cyprus’s mortgage rate at 4.27 per cent—above the eurozone average of 3.59 per cent—a 25-year mortgage would cost about €1,750 monthly, consuming two-thirds of typical household income.
According to the Real Estate Agents Registration Association, 489 apartment transfers were recorded nationwide in the second quarter of 2024. Limassol recorded the highest average apartment value at €246,919, significantly higher than other regions. Average values were €134,031 in Nicosia, €133,058 in Larnaca, €122,846 in Paphos, and €109,804 in free Famagusta.
Kyriakos Kiliaris, Chief Marketing Officer at Danos, predicts strong demand will continue into 2025. “Without specific measures and if demand exceeds supply, prices will inevitably rise further. The government’s €77 million measures are well-intended, but young couples struggle to secure loans without initial capital. The core issue isn’t the quality of these schemes but that young couples’ incomes are insufficient to finance their home-buying aspirations”.
Kiliaris suggests implementing a tax on unused residential properties, similar to measures being considered in France. He also recommends public-private partnerships for developing affordable apartments on state-owned land, citing Portugal’s approach of offering low-interest loans to young buyers, streamlining housing development permits, and reducing VAT on renovation and construction projects.
Read more:
