Central Banks calls for vigilance over rising housing prices in Limassol due to CBI scheme

The Central Bank of Cyprus (CBC) on Tuesday called for vigilance and close monitoring of the rising prices in housing particularly in Limassol pushed by the Cyprus Citizenship by Investment Scheme, called as the Cyprus Investment Programme.

The residential property prices index compiled by the CBC for the third quarter of the 2018 marked a moderate increase of 0.3% compared with the previous quarter, whereas its annual growth amounted to 1.6%.

However, prices of flats in the southern coastal town of Limassol climbed by 8.7% year on year, the highest of all cities, and 2.9% compared with the previous quarter, marking continued growth associated with the island’s CBI scheme.

In the third quarter of 2018, flat prices in Paphos climbed by 5.2% year on year, in Famagusta by 5%, in Larnaca by 2.7%, whereas in the landlocked capital of Nicosia the increase stood at 1.2%, the CBC said.

Despite the moderate average price growth, the growth momentum particularly in Limassol highlights the need for close monitoring of the developments and vigilance, the CBC added in its bulleting issued today.

Investment in real estate is one of the Cypriot CBi’s most popular criteria among the investors interested in acquiring the Cypriot passport, with the CBC noting that property purchases are funded with cash and not with loans provided by the Cyprus banking system.

Strong price pressures, which were analyzed in the previous Index seem to affect coastal areas of Limassol, the CBC added, noting that flat prices in Limassol record significant increase which are manifestly higher than other areas in Cyprus, while flat prices are accelerating faster than house prices.

Moreover, the CBC also notes that residential prices in Famagusta and Paphos, affected by demand foreign demand, record significant increases compared with the capital Nicosia, where price increase is subdued.

Source: Cyprus News Agency