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Falling home prices

The Cyprus Central Bank has reported that home prices continued to fall during the second quarter of 2016 by an average of 0.6 per cent for houses and 0.2 per cent for apartments.

Cyprus home prices fallingFIGURES published earlier today by the Cyprus Central Bank for the second quarter of 2016 appear to contradict other recently published property price indices that report property prices have stabilised or are rising.

In its Residential Property Price Index for the second quarter of 2016 the Central Bank reports that the general home price index fell 0.5%, with house prices falling by 0.6% and apartment prices falling by 0.2% compared to the previous quarter.

Famagusta saw the largest quarterly fall in the home price index (-2.9%) followed by Limassol (-0.8%) and Nicosia (-0.6%). However Larnaca and Paphos saw marginal increases in home prices of 0.4% and 0.1% respectively.

On an annual basis, the home price index fell 1.7% in the second quarter, with house prices falling by an average of 2.1% and apartment prices falling by an average of 0.4%.

In its report the Central Bank notes that it employs a different methodology to that of RICS (Cyprus) as it uses data collected from the commercial banks. (RICS, which uses a methodology developed by Reading University in the UK, reported that house prices rose 0.3% over the quarter and by 1.1% annually, while apartment prices rose 0.2% over the quarter and by 1.1% annually.)

But despite the figures reported today, the Central Bank remains optimistic about market trends. “The recent slight fall in the home price index reflects a stabilisation trend on the market and/or a reversal of negative trends.”

The Central Bank also referred to positive trends in the property sector including an increasing number of sales (up 31.6% compared to the same period last year and reaching levels similar to those in 2011) and increased sales of cement.

Readers' comments

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  • Phil says:

    Hi All

    Question: When the land registory department where sent out to value property as part of the IPT for 2013 values, mine was valued at a mind blowing €580000. With the constant falling value of property if I were to sell my property at these falling value (and what the market will pay) when it came to paying capital gain tax on profit of the sale would it be on the sale price or the land registory value ie €580000

    Answer: ????? bet I know.

    Ed: From the Department of Lands & Survey’s website “the General Valuation conducted by the DLS may be used only for taxation purposes. In the case where a land owner or other interested person needs a valuation for other purposes, such as for raising a loan, forced sale, investment, purchase or sale of real estate, then he/she should consult a specialized expert valuer, Member of the Cyprus Technical Chamber (E.T.E.K.).”

    Phil

  • Stephen ryan says:

    Hey.

    Something happened this week that wasn’t mentioned by any of the media.

    With all of the unification talks it wasn’t touched on.

    The fact was that the national debt of Cyprus passed the 20 billion mark. Our interest rises by 36 euros per second, or well over a billion Euro per year. How this can be repaid baffles me.

    I don’t think this huge amount can be repaid. The ECB. the IMF know this perfectly well.

    If you paid top dollar for property here forget a return or even getting anywhere near your money back. I’m afraid the game has gone.

    All the best X X x

  • Mike says:

    Deanna – The properties built but unnoccupied are probably of the wrong type or in the wrong area, discerning Russian or Chinese wealth does not want little concrete boxes originally built for the North European predominantly British buyer.

    andrewm – I feel you give far too much credit in assuming there are ‘business people’ behind these building projects. Assuming they know something we don’t or have some kind of strategy plan is, if you will forgive me, far too generous. What they do know is they need not repay what they have borrowed to build the projects and that is in plain the strategy plan. I’m sure you and I and any other individual could build any number of units if we were able to secure the loans to do so and not pay it back. Just a thought (supported by the list of NPLs).

  • andrewm says:

    There are business people behind these building projects so I’m guessing they know something we don’t or have some kind of strategy plan with these developments that carry on even though we see warning signs.

  • Deanna says:

    They need to stop building until all the unfinished structures are sold. Massive over-supply.

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