Rising interest rates, which have led to increased borrowing costs, have consequently weighed heavily on mortgage demand in Cyprus, according to Delfi Partners’ analysis, which examined data for the first three quarters of the last four years.
Demand for housing loans has been affected by the European Central Bank’s (ECB) interest rate increases, aimed at bringing inflation under control.
Notably, the fluctuations in Euribor—a critical benchmark for Cyprus’s mortgage rates—have increasingly impacted the volume of mortgaged properties as rates have climbed to higher levels over the past four years.
In 2021, for instance, when Euribor stood at -0.521 per cent, Cyprus recorded 11,289 mortgages in the first nine months, benefiting from favorable borrowing conditions. By September 2022, however, Euribor had climbed to 1.24 per cent, and mortgage numbers fell slightly to 11,218, marking an early impact of higher rates on borrowing patterns.
The Cyprus Chamber of Commerce and Industry (Keve) views these new industrial units as instrumental in bolstering the country’s economic resilience and competitiveness. These developments, therefore, not only support job creation and local production but also create new export opportunities.
“The establishment and operation of these plants highlights the potential of our country as an attractive investment destination, creating new jobs and promoting Cypriot production both locally and internationally,” Keve noted in a statement.
With advanced technology and high production standards, the plants are poised to play a crucial role in the food and beverage sector’s growth.
Further underscoring Cyprus’ economic progress, the Cyprus Statistical Service (CyStat) recently reported robust growth across key sectors in the first half of 2024, with manufacturing, construction, and tourism showing notable gains.
Specifically, manufacturing production rose by 3.7 per cent year-on-year in the January-July period. In construction, activity surged, with the total area of approved building permits reaching 1,627.5 thousand square meters from January to June, up 46.5 per cent compared to the same period in 2023.
In addition, vehicle registrations saw a sharp rise, with total registrations up 15.9 per cent to 34,391 units in January-August. Notably, within this, private saloon cars increased by 22.5 per cent, while light trucks jumped by 41.5 per cent, indicating a broader boost in consumer confidence and investment across various sectors.
On Monday, the Cyprus Stock Exchange (CSE) opened on a downward trend, with the general index reaching 198.68 points by noon, reflecting a 1.25 per cent decrease.
Similarly, the FTSE/CySE 20 Index recorded a 1.27 per cent decline, trading at 121.11 points. Daily turnover stood at €170,582.34.
In sector performance, the main market experienced a notable loss of 1.61 per cent, while the alternative market saw a slight dip of 0.01 per cent.
The investment companies index faced the steepest drop, down by 3.29 per cent, with the hotels sector also recording a minor decline of 0.12 per cent.
Among the most actively traded securities, Bank of Cyprus led with a volume of €159,000.73, down 0.68 per cent.
Demetra Holdings followed with €3,921.96 in trades, marking a 3.33 per cent decline.
Cyprus Cement Company held steady with €3,825 in transactions, Hellenic Bank fell by 1.25 per cent per cent with €1,784.96 traded, and Claridge Public saw a 2.63 per cent decrease on €1,295 in trading volume.
