DESPITE the general fall in sales and prices of property, the luxury real estate market in Cyprus seems to be weathering the crisis well according to the international property consultancy firm Frank Knight.
In its report “Cyprus Residential Development Prime market report 2012” Frank Knight says that, since the peak of the market, prices in the best second-home locations have held up relatively well, with prices falling by around 20%, while property prices in the secondary and tertiary locations have fallen by around 30% and 40% respectively.
The report points out that values in these second-home markets tend to be more volatile; rising faster in times of prosperity and falling sharper in times of austerity.
However, “Unlike the domestic housing market and the core second-home market, demand for the very top-end of the market has remained strong over the past couple of years”, says the report.
It goes on to say that “Estimates vary, but against a backdrop of falling prices across the country, values across prime markets have generally remained flat over the past two years. However, at some of the very top developments unit prices have risen by around 10% on average.”
According to Frank Knight, demand at prime developments is entirely driven by international buyers. The sub-€500,000 market is dominated by buyers from the UK. In the €500,000-€2m price bracket, the market is made up mainly of Russian and other European buyers, while the very top-end (over €2m) attracts buyers from Russia and other CIS countries.
Cyprus Residential Development Prime market report 2012 by Knight Frank Residential Research.