Companies operating in the third-party real estate industry have had to navigate numerous economic headwinds in recent years, ranging from rising interest rates, spiralling inflation and muted economic growth. Revenue is projected to sink at a compound annual rate of 3.7% over the five years through 2024, including an estimated slump of 2.1% in 2024 to €196.2 billion, while the average industry profit margin is forecast to reach 34.6%. Amid spiralling inflation, central banks across Europe ratcheted up interest rates, resulting in borrowing costs skyrocketing in the two years through 2023. In residential markets, elevated mortgage rates combined with tightening credit conditions eventually ate into demand, inciting a drop in house prices. Rental markets performed well when house prices were elevated, being the cheaper alternative for cash-strapped buyers. However, even lessors felt the pinch of rising mortgage rates, forcing them to hoist rent to cover costs and pricing out potential buyers. This led to a slowdown in rental markets in 2023, weighing on revenue growth. Revenue is forecast to swell at a compound annual rate of 4% over the five years through 2029 to €238.7 billion. Following a correction during 2024, housing prices are set to being recovering in 2025 as fixed-rate mortgages begin to drop and economic uncertainty subsides, aiding revenue growth in the short term. Over the coming years, Proptech, which has been heavily invested in, will force estate agents to adapt, shaking up the traditional real estate industry. A notable application of Proptech is the use of AI and data analytics to predict a home’s future value.

Key information about House Prices Growth

• Cyprus house prices grew 6.5% YoY in Sep 2024, following an increase of 8.0% YoY in the previous quarter.
• YoY growth data is updated quarterly, available from Mar 2007 to Sep 2024, with an average growth rate of 0.9%.
• House price data reached an all-time high of 25.3% in Sep 2007 and a record low of -9.4% in Mar 2014.

Housing Index in Cyprus decreased to 112.47 points in the fourth quarter of 2024 from 113.62 points in the third quarter of 2024. This dataset provides - Cyprus House Price Index - actual values, historical data, forecast, chart, statistics, economic calendar and news.

The Direct Real Estate Activities industry have come up against numerous headwinds in recent years, ranging from the COVID-19 outbreak in 2020 to the rising base rate environment in the years since, which have inflated borrowing costs for potential buyers. This is a sharp contrast to the ultra-low interest environment seen over the decade following the 2008 financial crisis. Revenue is forecast to fall at a compound annual rate of 4.0% over the five years through 2024 to €588.2 billion, including an anticipated drop of 3.1% in 2024. However, profitability remains strong, with the average industry profit margin standing at an estimated 41.6% in 2024. Central banks across Europe adopted aggressive monetary policy in the two years through 2023 in an effort to curb spiralling inflation. This ratcheted up borrowing costs and hit the real estate sector. In the residential property market, mortgage rates picked up and hit housing transaction levels. However, the level of mortgage rate hikes has varied across Europe, with the UK experiencing the largest hike, meaning the dent to UK real estate demand was more pronounced. Commercial real estate has also struggled due to inflationary pressures, supply chain disruptions and rising rates. Alongside this, the market’s stock of office space isn’t able to satisfy business demand, with companies placing a greater emphasis on high-quality space and environmental impact – properties in many areas aren’t suitable due to their lack of green credentials. Revenue is slated to inch upwards at a compound annual rate of 3.1% over the five years through 2029 to €651.3 billion. Although economic conditions are set to improve in the short term, elevated mortgage rates will continue to weigh on demand for residential property. However, the warehousing market is positioned for solid growth, benefitting from the rise in e-commerce. This is particularly relevant to Poland, which leads the EU warehouse market.

Graph and download economic data for Residential Property Prices for Cyprus (QCYN628BIS) from Q1 2002 to Q4 2024 about Cyprus, residential, HPI, housing, price index, indexes, and price.

Building contractors and developers depend on various socio-economic factors, including property values, underlying sentiment in the housing market, the degree of optimism among downstream businesses and credit conditions. All of these drivers typically track in line with economic sentiment, with recent economic shocks spurring a difficult period for building contractors and developers. Nonetheless, the enduring need for building services, particularly to tackle housing shortages across the continent, ensures a strong foundation of work. Revenue is forecast to decline at a compound annual rate of 2.9% to €1.1 trillion over the five years through 2024. Building construction output recorded strong and consistent growth across Europe in the years leading up to the pandemic, buoyed by rising house prices and a return to economic stability as the effects of the financial crisis faded. Operational and supply chain disruption caused by the pandemic reversed the fortunes of building contractors and developers in 2020, as on-site activity tumbled and downstream clients either cancelled, froze or scaled back investment plans. Aided by the release of pent-up demand and supportive government policy, building construction output rebounded in 2021. Excess demand for key raw materials led to extended lead times during this period, while input costs recorded a further surge as a result of the effects of rapidly climbing energy prices following Russia’s invasion of Ukraine. Soaring costs and the impact of the economic slowdown on both the housing market and investor sentiment have led to a renewed slowdown in building construction activity across the continent. Revenue is forecast to decline by 1.5% in 2024. Revenue is forecast to increase at a compound annual rate of 4.9% to €1.5 trillion over the five years through 2029. Activity is set to remain sluggish in the medium term, as weak economic growth continues to constrain investor sentiment and high borrowing costs hold back the housing market. Contractors and developers will increasingly rely on public sector support, including measures to boost the supply of new housing as countries seek to tackle severe housing shortages.

The Cyprus ICT market, valued at approximately $0.89 billion in 2025, is projected to experience steady growth, driven by increasing government investments in digital infrastructure, rising adoption of cloud computing and big data analytics across various sectors, and the burgeoning e-commerce landscape. The 2.29% CAGR indicates a consistent, albeit moderate, expansion over the forecast period (2025-2033). Key growth drivers include the BFSI sector's ongoing digital transformation, the expanding needs of the IT and Telecom industry itself, and the government's initiatives to modernize public services through technology. The market segmentation reveals that the Software and Services segments are likely to dominate, given the increasing demand for sophisticated software solutions and specialized IT services across all enterprise sizes and industry verticals. While the hardware segment will contribute significantly, its growth may be relatively slower compared to software and services due to the nature of hardware lifecycles and the shift towards cloud-based solutions. Small and Medium Enterprises (SMEs) represent a substantial market segment, presenting significant opportunities for ICT providers specializing in affordable and scalable solutions. However, challenges such as limited skilled workforce and potential cybersecurity risks could act as restraints to market growth. The forecast for 2033 suggests a market size exceeding $1.1 billion, reflecting the cumulative effect of consistent growth. The strong presence of multinational technology corporations like Microsoft, IBM, and Oracle in Cyprus underscores the country's strategic importance within the broader regional ICT landscape. Furthermore, the involvement of local players like AlleoTech and COMIT Solutions indicates a thriving local ecosystem, contributing to the overall market dynamism. While the "Other Industry Verticals" segment warrants closer analysis, it is expected to see growth driven by the increasing digitalization across diverse sectors, mirroring broader global trends in ICT adoption. To maintain competitiveness, Cypriot ICT companies will need to focus on innovation, strategic partnerships, and developing a skilled workforce capable of handling emerging technologies. Recent developments include: June 2024: Placy, an innovative AI assistant, is introduced in Cyprus to revolutionize its real estate landscape. The primary aim is to streamline the intricate real estate processes, providing professionals and clients with enhanced efficiency and deeper insights., March 2024: Cyprus, in a strategic move, has signed an Enterprise Agreement with tech giant Microsoft. The strategic agreement, valued at EUR 8 million, was sealed by the Deputy Ministry of Research, Innovation, and Digital Policy on behalf of the government. This agreement not only entails the allocation of 10,000 Microsoft 365 software licenses but also includes a suite of advanced tools designed to enhance the island's digital landscape and bolster the operational efficiency of its public sector.. Key drivers for this market are: Implementation of 5G is Back on Track, Growing demand for Cloud Technology. Potential restraints include: Implementation of 5G is Back on Track, Growing demand for Cloud Technology. Notable trends are: Growing demand for Cloud Technology.

Revenue is forecast to contract at a compound annual rate of 2.8% over the five years through 2024 to €239.9 billion. Since the inception of the COVID-19 pandemic, weak economic conditions have restricted the number of new projects coming to fruition, hindering the number of big-ticket tender opportunities available for electricians to bid for and obtain. Businesses have remained cautious amid an uncertain economic outlook, opting to preserve cash and postpone or cancel significant construction projects. Over the two years through 2024, inflationary pressures have persisted and retaliatory increases to the base rate have ballooned the cost of borrowing. Despite public funding and support for new residential properties, a cooling housing market has limited demand from property developers. Revenue is expected to dip by 2.5% in 2024. As inflationary pressures subside and business and consumer sentiment rebound, revenue prospects will grow and more large tender opportunities will come to fruition. Businesses will increase spending budgets in line with recovering economic conditions and recovering house prices will spur new opportunities in the residential market, contributing to a recovery in income. Revenue is forecast to expand at a compound annual rate of 3.3% over the five years through 2029 to €281.8 billion.