- Cyprus Property News Magazine - http://www.news.cyprus-property-buyers.com -

PIMCO’s property price assumptions rejected

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:

Nicosia

Limassol

Paphos

Famagusta

Larnaca

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.