ALTHOUGH it is generally believed that property prices in Cyprus have dropped by up to 20%, the Central Bank of Cyprus holds a different view. In its latest ‘Economic Bulletin‘ (in Greek) it reports that prices have slowed to a 10% increase from a 20% increase, which is in line with forecasts prepared on behalf of BuySell by MAP S.Platis.
This is in sharp contrast with the views expressed earlier this month by local property luminary Antonis Loizou who emphasised the fact that prices of tourist properties have already fallen by as much as 20%. The views of Mr Loizou are shared by hundreds of other businessmen surveyed by Stockwatch over the past few months who believe that the Cyprus property sector is in for a long period of recession.
But despite being questioned many times about the methodology it uses to prepare these figures, the monetary authority is extremely reticent about revealing the details – saying only that its index is based on “estimates of the value of properties used as a security for the granting of loans by the banks.” (The Central Bank’s figures are based on the first nine months of 2008, before the latest phase of the credit crisis started).
The Central Bank also reports that “Despite the anticipated negative impacts on the construction sector, the slowdown of the property prices might be proved as a positive development so as to avert any possible overheating in the sector of housing properties“.