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Cyprus real estate market 2016

In isolated cases, where the demand for residential real estate in Cyprus is low and distressed assets result in excess supply, further discounts of up to 40% of market value are possible.

Cyprus real estate 2016 - Delfi & PartnersDELFI Partners & Company’s report ‘Cyprus Real Estate Market Expectations & Forecasts’ concludes that the island’s economy will bounce back from the recession in the next five years, and that how the banking sector deals with NPL’s distressed assets and the potential need for recapitalisation is pivotal to a smooth recovery.

As well as providing an overview of the current state of real estate sector, the report provides forecasts for the main asset classes – office, retail and residential.

It considers that the island’s banking sector has the potential to make or break the recovery and that there is great potential for transactions well below the market value and extremely attractive short term returns. However much depends on whether the banking sector concerns regarding the level of NPLs and foreclosures have any harmful effects on the real estate market.

Delfi predicts that in isolated cases, “where the demand for residential property is low and distressed assets result in excess supply, further discounts of up to 40% of market value are not unlikely”.

Further reading

Cyprus Real Estate Market Expectations & Forecasts – January 2016

Readers' comments

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  • Concerned says:

    Delphi states “further discounts of up to 40% of market value are not unlikely”.

    Please clarify “Market Value” in the above statement…. 40% discounted from year ago or present valuations, (which are already adjusted to reflect market conditions)? or 2006?

    (Editor’s comment: Market Value is the price a buyer would pay for the property at its date of sale or within a shortly thereafter.)

  • John Mann says:

    I agree with what has been said, I think that the property market in Cyprus is as bleak now as when the crash was realized.

    Nobody of an official nature wants to clean up the system to make it better.

    They are all waiting for the fallout to pass meanwhile keeping their heads buried until when?

    The future is as black now as it was 2 or 3 years ago

  • Richard says:

    @Mike. I don’t think the quality of property vs their valuations in Cyprus has been much worse than in London. I work in very expensive homes – and if you drill in further than the facades and veneers – the finish is often quite poor (and corners are cut).

    The difference with the Cyprus property market is corruption on an industrial scale.

    The real issue is banks have turned into gambling establishments. We need to return all the property sector world-wide back to sensible practice. The lenders need to be re-mutualised to some degree and when lending the money – need to eyeball and know and understand where it’s going, who to & what for and build joint trust.

    Until that issue is fixed – I fear it’s all just rumour, sigh, speculation, pundits opinions, charts on a monitor and other general unsubstantiated puff & fluff.

    We all want a fair and timely resolution. We all need a fair and timely resolution. This time there isn’t a Chinese economic ‘miracle’ or a ‘credit boom’ or anything else coming over the horizon to perpetuate the validity of much of what we’ve grown to accept as fiscal & economic ‘wisdom’.

    Time to face the music – and maybe dig out Adam Smith?

  • scruffy says:

    What do they know? I don’t believe anyone can predict the future of the Cyprus property market with any degree of certainty.

    Yes they are right that in isolated cases there may be the opportunity to find 40% discounts but I wouldn’t mind betting that there will be few takers for such properties as the reason they will be so cheap will be either due to how deep they are mired in legal problems or how much they have been allowed to deteriorate. Or both.

    I believe that the Cyprus property market is unique because the failed system of purchasing property and the subsequent lack of trust is the main reason for its collapse and not normal market forces.

    This means that all predictive models re normal property markets cannot be applied with any accuracy.

  • Mike says:

    I’m not sure it will only be isolated cases. As I have maintained for years the Cyprus property market was vastly overinflated as those who remember Cyprus in the 50’s, 60’s 70’s, 80’s and 90’s will verify.

    Foreign willingness to pay whatever figure was plucked out of unimaginable heights then doubled and multiplied by plenty has led to to where we are today with telephone number price tags for a very inferior product.

    Those who at least built themselves or supervised the building at least had a chance of some quality but the market is still vastly overinflated and sadly the market will dictate the price no matter what any of us had paid for what we have. I personally believe that to be a good thing but perhaps not for the pocket.

  • pils says:

    When will Cyprus economy recover and the property prices recover?

    Firstly: banks require to co operated in a manor to satisfy many who have invested in the Cyprus property market and have loss there life savings. also money removed from their bank accounts without the owners permission.

    Secondly: with the miss selling property saga, corrupt developers and lawyers, would you invest in Cyprus ?

    Thirdly: Title deed fiasco.

    Distressed assets will still be distressed in the next 5 years plus due to the lay back attitude of banks and government officials.
    With government and bank officials in the land of make believe, how can Cyprus move on, to satisfy property investors alike and genuine business people.

    My answer to that is a big no, unless we give the above people, a free one way trip to the land of believe or not believe.

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