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Central Bank says property prospects are bleak

The future of the Island’s real estate market is bleak as prices continue to slump and there are no prospects of a recovery, according to figures released earlier today by the Island’s Central Bank.

ACCORDING to figures released on Thursday by the Cyprus Central Bank, property prices have dropped for a ninth consecutive quarter and have now returned to their 2007 levels.

But despite the downward trend, residential properties are still 32% more expensive than they were in 2006.

The downward pressure on prices is due to a combination of oversupply and liquidity problems and is most evident in the holiday home market as shown by the price falls in Paphos, Larnaca and Famagusta.

According to Central Bank data, residential property prices (houses and apartments) fell by by an average of 1% during the first quarter of 2012.

With the exception of Paphos and Famagusta, where prices fell by 3.1% and 2.4% respectively, price falls during the first quarter were slightly less than those experienced in the previous quarter.

However, there has been a slight slowdown in the rate at which prices are falling. This is partly attributable to the implementation of the new legislative measures introduced towards the end of last year that were aimed at stimulating the housing market.

On an annual basis, residential property prices have fallen by 4.9%. Apartment prices have dropped 4.3% and house prices have fallen by 5.4%.

The highest annual decrease has been in Paphos, where prices have fallen by 10.6%, while the lowest price falls have been in Nicosia, where they are down 3.2%.

According to Central Bank, the prospects for quick recovery in the housing market are not promising. This is due to the lack of liquidity in the market coupled with the measures being discussed between Cyprus and the troika to consolidate the island’s ailing economy.

Readers' comments

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  • Denton Mackrell says:

    @Holland/Eco-man/Dreamnomore and your 1001 other pseudonyms. The only thing we agree on is the need for embracing radical change in Cyprus. But that change has to be within Cypriot society, government, institutions, banking, judiciary, property sector, commerce etc. Don’t take my word for it. Listen to the public statements from the likes of authoritative Cypriots who have not been the cause of the current crisis: Nobel Prize winner Pissarides, Prof Stavros Zenios, Prof Theo Panayiotou, Mari Inquiry chairman Polis Polyviou, RICS property expert Pavlos Loizou etc etc. I agree with them and so apparently you think they too are exaggerating and ‘exacerbating the problem’ while, you, apparently flatly disagree and moreover have the superior solution! What are your expert credentials, I wonder?

    I am reliably informed that the Troika are in possession of much data regarding the ‘title deeds scandal’ and its impact on the banks (e.g. hidden toxic debt and undeclared developer NPLs), the government’s tax coffers (e.g. Euro 1bn+ tax missing from 130,000 properties not transferred) and the economy (e.g. construction industry struggling to survive).

    I quote you: “behind those scenes to which you are not invited or privy as your speak is too bias and negative”. I’ll ignore the bad English. So, if as you say I am just some died-in-the-wool taverna Brit (why not Irish?? do your homework!) exaggerating the current crisis in Cyprus (general and property), how come I have been invited to participate in a high powered national think-tank seeking to help Cyprus cope with the crisis and beyond?

    You are entitled to your views, however strange others are likely regard them. Your comments and assertions about me, however, are both factually incorrect and wildly fantastic. I’ll skip your fish suppers as I suspect you are ‘into’ globe fish.

  • Road Warrior says:

    Mr Holland,

    “The Title Deed issues are very real but nothing, and I mean nothing, as bad as this and other forums have you believe. It will be resolved and soon” !!!

    This comment alone proves how out of touch you are with reality and raises questions about the accuracy of any other comments you have or will make.

  • Gavin Jones says:

    Denton Mackrell & others.

    Some of us are well aware who ‘Mr. Holland’ may be (a new manifestation of Eco Man perhaps?) as the second sentence of his more recent comment betrays the style of another well known character who inhabits the Cypriot online community. Best to let him stew in his so-called ‘patriotic’ juice of defending the indefensible and mocking other commenters. A sad case.

    It would be better if he walked his dog instead of engaging in his familiar would-be repartee.

    As for the pronouncements of the Central Bank, more a question of being three years or more behind what most of us already knew.

    In addition, I suspect that the newly appointed Governor, an apparatchik of the President, has authorized this announcement more for the eyes of the troika rather than us mere mortals.

  • James JH Lockhart says:

    Mr Holland

    Dream No More

    This is Cyprus

  • Costas Apacket says:

    Mr Holland,

    I’m all for Eco savings.

    I have cavity wall insulation, loft insulation, thermostatic controls on my radiators, etc, etc., however can you expand on your claim that, and I quote:

    ‘The Title Deed issues are very real but nothing, and I mean nothing, as bad as this and other forums have you believe. It will be resolved and soon !!!!’?

  • Mr Holland says:

    Mackrell, Tartare sauce ….what you must do is open your eyes and also stop listening to the same old stuff.

    Europe has embraced change, stubborn old Brits living in someone else’s Island have not.

    Thousands have enjoyed property purchases without a problem and Cyprus can really do without the ‘Fishy Tales’ from Mackrell and Co to assist with the rebuilding and reshaping that is happening under some very upwardly facing noses.

    Mock all you like Mackrell and Co but behind those scenes to which you are not invited or privy as your speak is too bias and negative to have any major ‘Plaice’ at our ‘Fish Supper’.

    I will prove you wrong, and it’s not about Ego’s it’s about embracing change. Me and Ego-Man have much in common but that does not make us the same.

    Cyprus Construction is a mess because it did not follow any trend but it’s own and the results are for all to see.

    The Title Deed issues are very real but nothing, and I mean nothing, as bad as this and other forums have you believe. It will be resolved and soon !!!!

    It is your attitude Mackrell and those of similar disposition that actually exacerbates the problem…always with a pickled ‘opinion’ and never with a solution. And several other ‘wallies’ for good measure, add there ‘salt and vinegar’ and sour bitter gloom as you follow your agenda around this and other forums.

    Eco Build is not one dimensional, it just means that we will no longer have to put up with concrete and steel as The standard construction method.

    I am no Tree Hugger , but can at least see, that whilst attitudes are hard to change, and Cyprus takes longer than most for the ‘cent’ to drop, the way forward.

    Better and more efficient construction will pave the way for future investment.The whole of Europe has been doing what is so obvious for years.

    So, Mackrell, whilst you sneer from your Concrete/Ivory Tower you may ask why with 340 days of sunshine do we have no Solar to be proud of ????

    Why with more seaweed than most do we have no methods to use it????

    Why with the highest electric bills in Europe have we not sought to be more efficient ?????

    Why the reluctance to use any other materials to make the whole country more appealing environmentally and aesthetically.

    Give me the answers and I would be delighted to debate it here …you never know you may even learn that your scepticism turns to optimism during your stay.

    I look forward to along and healthy debate with my fellow Brits on here….AND Thank you Mr Howarth for the opportunity to present and discuss something new.

    Oh and by the way, It is not about money or property sales it’s about what we leave behind.

    ‘Food for thought’ whilst we prepare to put another ‘Dent on’ the Spratt

    Regards Holland, happy fishing

  • Denton Mackrell says:

    Holland? Hollandaise sauce? Who is this ego-maniacal pratwinkle with delusions of grandeur? It’s utter bullshit!

  • Jim says:

    Mr Holland. I presume you are the person Eco man mentioned, who is thinking of building wooden eco-friendly homes in Cyprus?

    I presume you have read Eco mans post & the replies he received.

    If after all that, you still intend to proceed, I wish you luck.

    Your only hope of success is, being able to supply the completed property along with a clean title deed, when payment is made. Nobody will give you a deposit on the promise of a completed property with the assurance of a title deed. People don’t buy that line anymore.

    Given the economic future of Cyprus, I doubt that house purchases will be at the top of peoples list. Managing to put food on the table will be enough of a challenge.

  • Hector says:

    “According to Central Bank, the prospects for quick recovery in the housing market are not promising.”

    Now there’s a stunning observation.

  • steve says:

    You were warned. You did nothing

  • Costas Apacket says:

    Obviously, no one could have foreseen this state of affairs coming about could they?

    I mean, all the Cypriot property establishment did was sell loads of poor quality properties to innocent and honest purchasers and then totally denied them their legal ownership rights for those properties, whilst existing or further encumbrances were placed onto those properties without the knowledge of the innocent purchasers.

    I ask you, what’s wrong with this?

  • Jim says:

    Ensuring a clean title deed is available at point of sale would go a long way to restoring confidence. Nobody wants to pay for a property they do not own.

    However, the developers assure us that the Chinese are flocking to Cyprus, desperate to hand over their cash.

  • UBoat says:

    “The downward pressure on prices is due to a combination of oversupply and liquidity problems and is most evident in the holiday home market as shown by the price falls in Paphos, Larnaca and Famagusta”.

    The Central Bank like all the others are just ignoring the fact that the lack of willingness to provide legitimate buyers of there Title deeds as usual, is also a substantial part of the problem. Hence creating the lack of liquidity they mention.

    To use a phrase you have to “keep calm and carry on” what else can us owners do when the goal posts are moved all the time. It would seem that there is plenty of liquidity in that area to sink a battle ship……?

    Now the impending austerity measures will make the situation even worse.

    Have a nice day folks

    UBoat

  • Fighting For Justice says:

    I don’t know where they get those figures from. Prices are now at 2007 levels and are higher than 2006 levels? They most certainly aren’t in the east of the island. 2007 was the peak of the prices and they have been falling steadily and sometimes dramatically since then.

    Personal experience tells me that they are at early 2004 levels.

  • Robert Briggs says:

    Also due to the Title Deeds scandals, developer covert loans & other gross malpractices,in both north and south on this Island.

    These horror stories are now well known throughout the world.

    Please note that excellent report by CPAG. “Update: July 2012 – EU Commission – ECHR” on this website.

  • Mr Holland says:

    Mr Howarth says Bleak

    World English Dictionary
    bleak 1 (bliːk)

    — adj
    1. exposed and barren; desolate
    2. cold and raw
    3. offering little hope or excitement; dismal: a bleak future

    Central Bank says ‘not promising’

    Just to put a slightly less negative perspective on the story.

    Indeed the existing stock, the over hang discussed last week on this forum, and the all too familiar holiday homes with little or no prospect of sales in any great numbers are worrying for Cyprus Real Estate industry.

    However, new ideas, green shoots of encouragement and alternative structures are getting massive interest accross the Island.

    Concrete and steel is having a well deserved break, on gardening leave , and only to return when prices are more realistic from over optimistic sellers and banks who are living in a bubble.

    Banks, need to reduce the asset values, mark to market and sell the overhang and then, and only then, will the true prices and new buyers start to emerge for the old stock.

    Are any of the properties laying unused and unsold ECO -FRIENDLY ???? POSSIBLY NOT….so what is the incentive to buy an overpriced, high energy consuming property ????

    The answer is out there and as Eco-Man suggested a good few weeks ago …is coming to a village near you !!!

    Changing values, green thinking and new and innovative ways will help the market …not boom but certainly help.If only it was promoted on these platforms then the information and statistics may well encourage some growth in what is a very tough market to say the least.

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