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Published RICS Cyprus Property Price Index 4th Quarter 2010

21 Apr, 2011
Oxana Mukhomedova

The Royal Institute of Chartered Surveyors (RICS) Cyprus have published fifth Property Price Index, a quarterly property price and rental index which is based on technique produced by the University of Reading, UK. The Index tracks property and rental prices across all districts and key real estate types.

In the 2nd half of 2010 Cyprus bore the aftereffects of the international financial crisis, with the economy slowing down plus the government's income decreasing. The 4th quarter saw the Cypriot economic climate showing certain indications of stabilisation and moderate growth, even though elevated concern about Greece and the local economy afflicted feeling.

Towards the end of 2010 there initially were some early indications of price stabilisation, with local buyers returning to the market taking advantage of lower prices for holiday homes and for permanent homes. Additionally, there appeared to be some renewed investor attention, in particular for city centre, prime, properties. Evidence of this nevertheless is anecdotal, as there happen to be no significant property purchases to support it. These signs need to be looked at within the wider perspective of a ongoing curtailing of loans by financing institutions, decreased profits as a consequence of inflation and salary cutbacks, and to a general change in people’s anticipations of future changes in capital values.

Cyprus properties for sale prices

The Property Price Index has documented a frustrating attitude in property prices across Cyprus’ key urban areas, with prices and the cost of rent falling across all districts. Non-commercial prices for both houses and flats dropped by 2.6% and 2.4% respectively, with the most significant fall for houses occurring in Limassol (-4.8%) and for apartments in Famagusta (-4.2%). P

rices of commercial properties dropped throughout all urban centers by an average of 2.5% for retail, 3.4% for office spaces, and 2.4% for warehouses

Year-on-year, selling prices fell by 10.8% for flats, 7.4% for houses, 7.0% for retail, 6.3% for office, and 4.8% for warehouses.

Property TypeNicosiaLimassolLarnacaPaphosFamagusta/
Paralimni
Cyprus
Apartments€167,131€167,131€160,534€139,189€118,097€150,226
Houses€511,642€446,873€381,019€427,385€391,604€431,705
Retail€1,066,471€687,375€544,837€509,615€393,036€640,267
Warehouses€2,223,00€2,517,772€1,804,388€1,361,094€1,153,125€1,811,876
Offices€771,037€571,080€421,436€459,345€306,008€505,781

Cyprus property rental values

Around Cyprus, rental values for flats dropped by 5.5%, for houses 5.9%, shops 3.8%, warehouses 4.4%, and office buildings 2.7%.

Year-on-year rental prices fallen by 7.2% for apartments, 11.8% for houses, 8.5% for shops, 3.0% for offices, and 3.9% for warehouses.

The quarterly change in capital and rental values reveals that all aspects and geographies of the property market are now affected, and that property owners are decreasing their rental prices in an effort to attract tenants. In parallel, many tenants are renegotiating the leases or going to smaller or more affordable properties. The reduction in rental prices could have a profound impact on the incomes of many locals and overseas homeowners, and is likely to increase the downward pressure on prices as the contrast between rent and capital values is emphasized.

Appraisal based initial yields

At the year-end initial yields were standing at 3.6% for flats, 1.9% for houses, 6.0% for retail, 4.8% for warehouses, and 4.8% for offices. These suggest that there is still room for rebalancing to occur

Full Cyprus Property Price Index can be downloaded here

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