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Cyprus property prices recovering

The RICS Cyprus Property Price Index for Q1 2016 reports increases in almost all districts and property types, with significant increases recorded in Paphos and Famagusta, while prices other urban areas are gradually bottoming out.

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RICS Cyprus Average Property Price Index

THE TWENTY-sixth edition of the RICS Cyprus Property Price Index issued earlier today reports that the average price of residential apartments and houses across the island rose by 1.2% and 1.5% respectively during the first quarter of 2016.

The Index reported price increases in almost all urban centres and all types of property, while prices in other urban centres are gradually bottoming out.

Famagusta recorded the largest increase in apartment prices (1.5%), while the largest increase in house prices (5.6%) was recorded in Paphos.

The value of retail properties fell by an average 0.5%, while the value of offices and warehouses increase by 1.5% and 1.2% respectively.

Compared to the first quarter of 2015, apartment prices have fallen by 0.2%, while house prices have risen by 0.6%. Prices of retail properties and warehouses have fallen by 1.3% and 2.3% respectively, while the price of offices has risen by 0.7%.

Given the prevailing economic conditions and the turbulence in the Cyprus banking system, there were relatively few transactions during the quarter of 2016 although volume was higher on a year on year basis.

Local buyers in particular were the most discerning as unemployment and high debt for locals maintained lack of interest. Furthermore, those interested are in purchasing property are trying to access bank-finance.

Rental Values

Across Cyprus, on a quarterly basis rental values increased by 3.6% for apartments, 1.8% for houses, 0.2% for retail, 0.4% for warehouses and office rents increased by 0.6%.

On an annual basis rents increased by 4.2% for apartments, 2.4% for houses and 2.4% for offices, while retail and warehouses dropped by 3.2% and 2.1% respectively.

Gross yields

At the end of the first quarter of 2016 average gross yields stood at 4% for apartments, 2.0% for houses, 5.2% for retail, 4.3% for warehouses, and 4.4% for offices.

The parallel reduction and/or stabilisation 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.

Readers' comments

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  • Pippa says:

    And elephants can fly

  • cyprus babe says:

    I don’t believe it

  • sky says:

    @nigel, yes I meant that “CBC index”…:)

  • sky says:

    @Nigel: why don’t they publish BoC index?

    Ed: The BoC doesn’t publish an index. If you mean the one produced by the Cyprus Central Bank – I’m waiting for it to be published.

  • Who Gives says:

    Hi Nigel wait a very long time is a very broad based statement in the Cypriot terminology which can be applied to majority of what puts the C in Cyprus. He just a few of the ones that spring to mind now.

    Clear back log of Title Deeds
    Ayia Napa golf course
    World class Marinas complex
    Accountability on NPLs
    Waiting on any Cypriot workman (J)
    Euro Disneyland Cyprus style
    The Development of Gas Reservoirs
    Unifercation of the Island
    Up to date Tourist facilitties on par with other holiday destinations
    Own Airline
    EU Building Standards/practices

  • Who Gives says:

    Nigel so what you saying is there is positive indications that prices are showing signs of stabilizing. The Cyprus property market is very depressed as Overseas investors are reluctant on buying a property in Cyprus even at bargain basement prices.

    There are too many negative factors that will prevent a recovery in property prices which majority being self inflicted.

  • sky says:

    Let’s wait for the BoC real property price Index… which curiously has got a hard time being published… :)

    Ed: You’ll have to wait a very long time for the Bank of Cyprus Index.

  • The views expressed in readers' comments are not necessarily shared by the Cyprus Property News.

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