DURING the third quarter of 2015, the Cyprus Central Bank’s (CBC) general housing price index, which includes houses and apartments, fell by 0.3%, compared with falls of 0.4% and 1.0% during the previous two quarters, indicating that prices may be stabilising.
Over the quarter house prices fell by 0.7%, while apartment prices rose 0.8%. (An increase in apartment prices was last recorded in the fourth quarter of 2009.)
On an annual basis the general housing price index fell 3.7% compared with an annual fall of 5% over the previous quarter, with house prices and apartment prices falling by 3.9% and 2.8% respectively, compared with annual falls of 4.6% and 6.2% in the second quarter.
The CBC reports that “The recovery of the economy, improving financial conditions, reduced lending rates and progress in structural changes to improve the framework for issuing title deeds are developments that are expected to have a positive impact on demand for real estate and on house prices.”
However, the report omits to mention of the possible impact of foreclosures on the property market.
Quarterly winners and losers
Famagusta saw the largest quarter fall in the general housing price index (-1.6%) followed by Nicosia (-1.3%) and Limassol (-0.1%). In contrast the price index in Larnaca and Paphos rose by 1.2% and 0.2% respectively.
Over the quarter house prices fell by 5.6% in Limassol and 0.6% in Famagusta; house prices in Limassol, Larnaca and Paphos fell by 5.1%, 2% and 2.3% respectively.
Over the quarter apartment prices fell 1.5% in Famagusta and 0.6% in Nicosia, while apartment prices in Limassol, Larnaca and Paphos rose 2.1%, 0.3% and 1.5%, respectively.
Thanks for all comments. Too late Caroline as I was persuaded that it was a great investment in 2008 with CHF mortgage too! No need to say any more on that. I think you’re right Scruffy. It would be nice to imagine a Cyprus where everyone has their title deeds and prices regulate again and I suppose they will do…… one day!. Yes TMHO it must be supply and demand and, as we know, there an over supply. It is a very long waiting game in all respects.
Property prices are governed by supply & demand – like anything anywhere. Problems with housing stock have been made far worse in Cyprus due to the manipulative, corrupt and deceptive practices taking place in all aspects of the buying and selling process.
Our only shred of hope is the Cypriot situation is simply so bad – it’s ultimately good for being an excellent place to start cleaning up world banking (which is about 200 years overdue)..
Morning Helen. If I were you I wouldn’t buy in Cyprus. Yes it’s lovely and warm but it’s a wolf in lambs clothing. I certainly wouldn’t recommend to anyone
@ Helen
When I was looking for a property I looked in Paphos originally. Apart from the fact that I found the East a more interesting area to live it was the affordability that was an important factor in our decision.
A comparable property in the Paphos area was more expensive than those in the East. Whatever the reason is for a larger decline I don’t think the eastern properties were over priced.
I think the deeds issue has affected and distorted the property market so much that putting a true value on
properties at this time is almost impossible.
I know several owners who have sold or trying to sell at ridiculously low prices due to the pressures created by the deeds fiasco, CHF mortgages, rip off lawyers etc and who do not believe their problems are over. It may just be that there are more of them in the East
I personally believe that prices have now bottomed out and that for the next couple of years they will remain stable.
Perhaps once figures on those who have actually been issued deeds under the new law emerge and the realisation that we are truly protected by law sinks in, property values will become at least more consistent.
It should be remembered that there are thousands of properties throughout Cyprus with no title deeds regardless of the deeds fiasco. This was not an issue for Cypriots pre the property boom but of course is an issue even for Cypriots now.
They now realise the importance of having deeds in order to protect themselves from the dangers experienced by expats. Also the realisation that no deeds will affect the valuation.
I have a Cypriot neighbour with four properties, including a shop in Nicosia, she has no deeds for any of them and originally said it was not an issue for her. She is now actively seeking legal advice on how to secure deeds for these properties after learning our situation re a hidden mortgage.
Can anyone provide an explanation as to why the Famagusta area property values/prices always show the worst decline and least growth? Could it be that they were so grossly inflated to start?
(Editor’s comment: I expect property prices in the area are low because there is little demand and people are reducing their prices in efforts to sell.)