THE CYPRUS Association of Valuers and Property Consultants has rejected assumptions made by PIMCO that property prices will fall a further 30% – 40% this year.
PIMCO applied these assumptions to help determine the recapitalisation needs of the banks as part of its due diligence review of the island’s banking sector; in its baseline scenario property prices will fall 30%, while in its worst case scenario they will fall 40%.
In a statement, the Association said that “Projections on property values are rather difficult to make, based on the current uncertainty in the global and local financial market.”
“Changes in property values between 2009 and 2012 vary considerably, depending on the district, region and even specific property, unlike a general approach used by PIMCO in its forecasts for the next three years” the statement said, and gave some evidence of changes in value of properties over the past three years:
- House and apartment values have fallen by up to 20%, while building plots have seen a 15% drop in value
- Commercial properties in the city have fallen by 10%.
- Property values in the suburbs – Dhali, Tseri, Deftera – have fallen by up to 30%.
- Limassol property values were more or less in line with those in Nicosia while the values of large residential and commercial projects on the beachfront were slightly down.
- The values of houses and land in tourist areas fell by up to 30 per cent, while apartment values have fallen by 40 per cent.
- Commercial property values have fallen by an estimated 25:; those in tourist areas have fallen 30%.
- In rural areas, property values have fallen 40%.
- The situation with properties in Famagusta is similar to those in Paphos, with the values of houses and building land falling up to 30% and those of apartments falling by 40%.
- Commercial property values have fallen 25%.
- Property values in the urban area of Larnaca have fallen by 25%, while the value of houses and apartments in tourist areas such as Dhekelia and Pervolia have fallen 35%.
The statement noted that “the Cypriot real estate sector is going through a recession which is reflected on the real estate sales which has been in decline since 2009,” adding that the decline will intensify.