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Cyprus real estate dynamics report

Ernst & Young Cyprus Ltd (EY) has published the first edition of its Real Estate Dynamics Report, which contains an analysis of recent developments in the Cyprus construction and real estate sectors.

THE NEWLY published Real Estate Dynamics report by Ernst & Young Cyprus Ltd (EY) provides a valuable analysis of the many factors that are currently affecting the Cyprus property market.

The twelve page report draws data from a number of sources, including the Department of Lands and Surveys, the Central Bank of Cyprus, the Royal Institution of Chartered Surveyors (Cyprus), and the International Monetary Fund.

Of particular interest is a map showing the annual fall in apartment and house prices together with the number of transactions in each of the Districts. It shows that the higher the reduction in prices, the greater the rise in the number of transactions. I.e. If prices fall, sales increase.

The reports points out that the island’s construction and real estate sectors have been hit hard by the economic crisis and continue to face significant challenges and that while mortgage interest rates have fallen over the past year, they are still considerably higher than the Eurozone average mortgage interest rates.

The market has also been adversely affected by the uncertainty over the implementation of the foreclosures legislation passed last year, whose implementation is currently blocked by opposition MPs. EY considers that the implementation of the legislation is expected to dramatically shorten the amount of time required to repossess property used as collateral, ultimately leading to enhanced activity in the real estate market.

Further reading

Cyprus Real Estate Dynamics – issue 1 Ernst & Young Cyprus Ltd.

Readers' comments

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  • Sam Mabrouk says:

    Thanks Nigel. in fact I will be visiting the island at the beginning of April, and I have that as a top priority on my list of things to do while I’m there. I have talked to a couple over the phone and they sounded like if they were realtors not attorneys.

  • @Sam Mabrouk on 2015/02/26 at 12:50 am – The first thing you must do is engage the services of a decent lawyer – under no circumstances should you use a lawyer who’s been recommended to you by the vendor.

    The British High Commission in Nicosia publishes a list of English speaking lawyers who may be able to help – see English speaking lawyers in Cyprus.

  • Sam Mabrouk says:

    @Peter Howard.. I’m not trying to low ball any one here. I checked prices online and called a couple different local realtors. The prices I heard from them for a studio/one bedroom was actually close to my really tight budget (I’m 31 yrs old). Again I understand that some people here paid top $ for some houses, and they are underwater now. I feel very sorry for them, and again I’m not trying to offend anyone here, just trying to get some advice. . Thanks

  • Peter Howard says:

    The grass is always greener elsewhere! I live in Cyprus but also involved with property in Spain. Prices of property in the popular tourist areas of Spain are now equivalent to Paphos – and sales and prices are predicted to rise this year.

    Steve R this survey gave an estimate of average house prices – not your individual property. Your property is at the bottom level of house prices, mix this with a few high value properties and you get an average. Please note that at present you value your 3 bedroom house at £180,000 – the price of an apartment in many parts of the UK. A cheap buy! Sam Mabrouk is looking for an apartment for less than £15,000 – and yet people here are complaining of unrealistic high prices.

    The grass is not always greener! Houses in Spain are built to the same standard as they are here in Cyprus. Bureaucracy is far worse than in Cyprus. Illegal properties in Cyprus do not get Title Deeds – in Spain they knock your house down. Transfer Fees on a resale property in Spain start at 7% even for a cheap apartment. Going back to the UK? remember your monthly council tax will be the same as your yearly bill in Cyprus.

    There is no Utopia – every single country has forums like this where people complain about their lot in life.

  • @Gary on 2015/02/26 at 12:35 pm – Unless the Title Deeds to the property are registered in your name, you do not have a mortgage; you have a home loan.

  • Gary says:

    “…and that while mortgage interest rates have fallen over the past year”. Not for people who have purchased a holiday home they have not. Why are the banks allowed to discriminate against a particular type of customer. At the end of the day they provided a housing loan to a customer at an agreed interest rate. They then raised this significantly and now refuse to reduce it for part of their customer base. Whether the customer lives in the house as their primary residence or not should not dictate what interest rate the bank can charge.

  • Deanna says:

    So, did we really need a ‘dynamic’ (laughable on its own) report of the obvious?????

  • Mike says:

    Forgive me, I also meant to add that following on from the Equitable Life debarcle I personally would look upon any report from Ernst & Young with some scepticism and question it’s sources of information and conclusions robustly. I hope I do not do them an injustice as this is allegedly E&Y Cy but experience has taught me to be sceptical.

  • Mike says:

    To Peter Davis 25/2 8:52pm – Peter, my belief is any promotional programme on TV or radio re property will always talk up prices.

    Cyprus property, taking a like for like in build quality, structural integrity, infrastructure, local environment, after sales service and administrative/legal compliance, is still vastly overpriced. In many cases, in reality, far too many built, paid for and inhabited properties would, in other areas of the world, be subject to demolition orders. Not what any of us wants to hear but as it is. With that in mind I personally cannot see that property is currently under-priced and of course if, like Spain, they fell to 2003 levels then we may be seeing a realistic re-adjustment and buyers would return me and others like me included. Not a chance at the moment however.

    I bought in 2005 & 2006 but not at asking prices as the fantasy of asking telephone number prices had started by then.

  • Steve R says:

    Where do they get these prices from. They are far from reality and the present market prices that are on offer. I have a three bedroom villa in Paphos with an 8×4 pool that is 8 years old. I would be over the moon if I could get anywhere near the stated price of €345,000 for it. The real figure is nearer €245,000.

  • Sam Mabrouk says:

    I have been looking for a cheap one bedroom apartment anywhere in southern cyprus that can match my very tight budget of 20,000 to 25,000€. I will be visiting the island April 4th to 7th. Any advice on where to look or what to do? Thanks!

  • @Peter Davis on 2015/02/25 at 8:52 pm – That’s a very interesting observation. I’m giving a talk tomorrow about the property situation here in Cyprus and have been using European Central Bank data to compare residential property prices in Cyprus and Spain.

    Prices in Spain have fallen to the level they were at the end of Q3 2003 – but prices in Cyprus have only fallen back to the level they were at the end of Q3 2006. This would imply that that further price falls in Cyprus should be expected over the next year or two.

  • Peter Davis says:

    Watching ‘A Place in the Sun’ I was surprised at the cost of villas in Italy, 2-3 the price of Cyprus, can’t understand why that is. The cost of villas in Spain also appeared more expensive. Is this a sign that Cyprus is now under-priced?

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