THE EUROPEAN Central Bank has found that properties in Cyprus remain undervalued by between 4% and 16% but the European Commission remains convinced they remain overvalued by 5% due to a pre-crisis artificial inflation of prices.
The position of the Central Bank of Cyprus is in line with its European counterpart; prices have fallen to late 2006, early 2007 levels which the bank consider reflect realistic values.
According to the European Central Bank, Cyprus property prices from the first quarter of 2007 until and including the second quarter of 2014 were too high, but became undervalued by the fourth quarter of 2015 by between 4-16%.
However, the European Commission says that taking into account property prices between the first quarter of 2002 to the first quarter of 2015, prices remain overvalued by some 5% in comparison to their long-term average value.
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If one wants to have an actual idea of the Cypriot property market, just look at the average rental prices here in Cyprus…then do the maths, taking into account an average real estate European yield of 6% (although Cyprus economy is rather at the low end of the European economies rather than at the average)…and then you will realize that Cyprus real estate market is over evaluated 120% …:)
ps : when taking into account the rental prices, don’t ask the real estate agents, just ask in the neighbourhood (where you are planning to buy) how much people are devoting to their rent for a similar property…:)
Ed: As it says repeatedly in the RICS (Cyprus) Property Price Index:
“The parallel reduction in capital values and rents is keeping investment yields relatively stable and at low levels (compared to yields overseas). This suggests that there is still room for some re-pricing of capital values to take place, especially for properties in secondary locations.”
Well now, it all depends which pair of glasses you’re looking through, doesn’t it. The Commission doesn’t have any money tied-up in these properties, whereas the banks….
Any property is worth what every someone is prepared to pay for it in condition market conditions. Need too consider that Spain, Portugal, France offer better value property that built to a EU standard. Why would you want to risk investing money in property in Cyprus that if wanted to liquidate at short notice the chances of selling on remote unless give it aware.
The real facts are that the short lived property boom is long gone with majority of people looking at 2nd homes are very cautious of investing in Cyprus so prices will remain low to generate local sells at current levels with only high end properties being picked up at discount prices by a few Overseas property speculators.