Latest Headlines

RICS Cyprus property price index published

Earlier today, RICS Cyprus published the first issue of its property price index which is based on a methodology developed by Reading University in the UK.

AROUND eighty people gathered for the launch of the RICS Cyprus Property Price Index in Nicosia earlier today. The Index will be published quarterly and aims to contribute to the transparency of the property market in Cyprus.

Attendees at the launch were addressed by the President of RICS Cyprus, Petros Stylianou MRICS, the vice-President of ?EEOKK Anna Iacovou FCIArb MRICS, and by the ex-Minister of Finance, Dr Michalis Sarris.

Mr Stylianou highlighted the significance of the Index in bringing an identifiable measure of property prices and returns, whilst Mrs Iacovou noted the need for a similar Index on construction costs which identified market trends and the changing economic landscape.

Dr Sarris elaborated further on the importance of clarity in times of economic turbulence in order to instil confidence in investors and the public as a whole.

The Index has been designed to provide reliable indications of trends and broad changes in real estate pricing of apartments, houses, offices, high street retail premises, warehouses and offices and it tracks property prices and rents across 46 locations.

The methodology on which the RICS Cyprus Property Price Index is based was designed by Professor Dr Pat McAllister MRICS and Dr Franz Fuerst from the Reading University Department of Real Estate & Planning at Henley.

Professor McAllister spoke of the important role of the Index in identifying what is happening in the Island’s property market and its usefulness to buyers, sellers, mortgage lenders, real estate companies and associated businesses. He then went on to present the first issue of the RICS Cyprus Property Price Index (click here to view Professor McAllistair’s presentation):

Average Unit Price (Euro)
NicosiaLimassolLarnacaPaphosFamagusta –

Source: RICS Cyprus

Average Monthly Rent (Euro)
NicosiaLimassolLarnacaPaphosFamagusta –

Source: RICS Cyprus

Initial Yields (Annual Rent/Price)
NicosiaLimassolLarnacaPaphosFamagusta –

Derived from: RICS Cyprus Property Price Index

Outline of the properties used in calculating the index:

Apartments – Two bedroom, 85m2, Medium quality.
Houses – Three bedroom with garden, Semi-detached, 250m2, Medium quality.
Retail – High-street retail, 100m2 ground floor area with 50m2 mezzanine.
Warehouse – Light industrial area, 2,000m2, 200m2 office space.
Office – Grade A, City centre location, 200m2

Commenting on the Index Professor McAllister said that “the values will provide you of the best estimate of what you will be able to sell your property for”.

Speaking about the initial yields (retail, warehouse and office) he said “Compared to other EU markets, initial yields appear low. These may show that rents are being kept artificially low by the tendency of companies to occupy properties with alternative uses (mainly residential) in order to minimise their costs. An alternative explanation is that property prices are too high due to the lack of land supply and the price boom of the past few years.

On the general subject of property price indexes, Professor McAllister said that indexes produced by banks tended to undervalue property because they used them for evaluating mortgage applications.

Dr Sarris referred to the (now defunct) BuySell Home Price Index. He said that this attempt to monitor selling prices was followed with close interest by the banks which, “wrongly” in his opinion, were lending 100% or 110% of property values on the basis that a rising index provided confirmation that their loan portfolios were secure.

He suggested that a certain approach by the banks had helped to sustain inflated prices, which will be reflected in any index. “Some people would argue that over the last few years, there was an explosion in property prices connected with the profitability of developing. Prices have not been affected (currently) because banks have chosen not to press developers to repay their loans – they have extended more loans to allow the original ones to be paid. So the developers are now saying: why should I reduce my price, if I’m not forced to sell?

Chairman of the Cyprus Land and Building Developers Association, Lakis Tofarides, said that property prices were 10 to 11 times the average salary because the price of land has rocketed over the last ten years and represented some 40% – 50% of a property’s overall cost. He added that distortions in the market were due to the tax system in Cyprus and that property-related taxes were very high compared to other countries. He also expressed his concern over the government’s intention to reassess the property tax system as it might lead to even higher level of taxation.

Press Release from RICS Cyprus

The RICS Cyprus Property Price Index monitors hypothetical or notional buildings, each having specific characteristics. Details of these hypothetical properties are provided in the University of Reading’s report.

The provided price per square metre is based on the Gross External Area of the property (as defined in the RICS’ Code of Measurement Practice 6th Edition), which includes the living area and covered verandas but excludes common areas.

This is the first publication of RICS Cyprus Property Price Index, a quarterly publication which is based on methodology produced by the University of Reading, UK. The Index has been designed to track property and rental prices across all the districts of Cyprus, and monitors changes in residential properties (apartments and houses), offices, high street retail, and warehouses. This first round of data gathering and processing has produced the base of the Index, i.e. the base prices, on which all future changes in price and rental level will be benchmarked against.


The beginning of 2010 finds Cyprus in the midst of the global economic crisis, as the economy begins to feel the brunt of the slowdown in economic activity, a decrease in income from taxation, and a severe reduction in property transactions (circa 50% lower in 2009 from 2008). The latter is attributed to the decrease in overseas buyers (down around 80% compared to 2005-2008) and to the curtailing of loans by banks and other financing institutions for property purchases.

Market Selling Values

The Property Price Index has recorded what can only be described as the anticipated spread of property prices across Cyprus’ major urban areas. The highest prices for high street retail, offices, and warehouses is recorded in the bigger urban centres of Nicosia and Limassol. Warehouses are more expensive in Limassol by 18%, likely due to the presence of the Island’s main commercial port.

House and apartment prices are spread evenly across the Island, with an average price of €1,865/m2 for apartments and of €2,001/m2 for houses. The low standard deviation across all cities of only 9% and 10% respectively shows that, excluding tourist areas and areas of special value, e.g. areas with sea views, “named areas”, etc, the vast majority of homes for locals are evenly priced.

Market Rental Values

The distribution of rents shows an interesting dichotomy between Nicosia and the coastal cities. Compared to Nicosia, rents for office space and for houses are higher in Limassol, by 68% and 13% respectively, probably due the presence of overseas companies. Also, warehouse rents are 78% higher due to the presence of the port. Indeed, Nicosia has the lowest warehouse rental costs across Cyprus.

Investment Yields

Investment yield is a term rarely used in Cyprus as most companies own their real estate instead of leasing it. However, yields are a useful tool showing the relationship between rent and property prices. Initial yields on commercial property stand at 6.1% for retail, 4.7% for offices, and 4.8% for warehouses.

These low yields may show that rents are being kept artificially low by the tendency of companies to occupy properties with alternative uses (mainly residential) in order to minimise their costs. An alternative explanation is that property prices are too high due to the lack of land supply and the price boom of the past few years.

Contributing professional bodies

Profile of  RICS

RICS – the Royal Institution of Chartered Surveyors – is the largest organisation for professionals in property, land, construction and environmental assets, worldwide. The organisation was created in 1868 and now has over 140,000 members in 146 countries. RICS Europe is based in Brussels and represents 17 national associations, with over 8,150 members in Continental Europe. Visit and www.rics.orq for more information.

Profile of ?EEOKK

The Cyprus Association of Quantity Surveyors and Construction Economists (?EEOKK) is the association that represents Chartered Quantity Surveyors and Quantity Surveyors whose main area of work is in Cyprus and they permanently live in Cyprus. Visit www.seeokk.orq for more information.

Index parameters and methodology


The methodology underpinning the RICS Cyprus Property Price Index was developed by the University of Reading. UK. The report is available on

Coverage and Variables Monitored

The RICS Cyprus Property Price Index monitors the urban centres of Nicosia, Limassol, Larnaca, Paphos and Paralimni-Famagusta. The Index only tracks prices in Republic of Cyprus’ government controlled area and not in the occupied North.

In each of these centres, the index monitors the Market Value and Market Rent, as defined in the RICS Red Book, across the four main property sectors – office (CBD), retail (high street), industrial (warehouse) and residential (houses and apartments).

Recognising that there are sub-districts within these urban areas which operate and behave in a varying manner, a number of these is monitored in order to derive the composite index for each category per urban area.

The information provided in this publication is based on the average price and rent of the sub-districts monitored per urban centre per sector. The complete list of these sub-districts can be found in the University of Reading’s report which is available on

Nature of Notional Buildings

The RICS Cyprus Property Price Index monitors hypothetical or notional buildings, each having specific characteristics. Details of these hypothetical properties are provided in the University of Reading’s report.

The provided price per square metre is based on the Gross External Area of the property (as defined in the RICS Code of Measurement Practice 6th Edition), which includes the living area and covered verandas but excludes common areas,


The index is produced on a quarterly basis.

Monitoring Process

The estimation of price levels is carried out by accredited RICS property professionals who are active in the relevant markets.

Readers' comments

Comments on this article are no longer being accepted.

  • Menoptera says:

    Although the methodology for the report is perfectly sound, surely the entire report is flawed in its conclusions by the actual areas within each major town that were chosen for study?

    I have looked at the various notes in detail and know that the areas listed as covered for both Paphos and Limassol are relatively downmarket and have more bearing on the local market than the foreign investor market.

    Whilst this is no bad thing, the report will be flourished around the UK, for example, as ‘proof’ that the cost on off-plan or new properties for investment purposes or expatriate residential use in Cyprus is ‘too high’.

    The calculations do not not take into account the cost of land for new properties at all and, inevitably, ignores such imponderables as the value of a beautiful view or added facilities in the case of a resort complex, all of which form a part of the sake price of a new build for the investor.

    I just wish I could find a 3 bedroom house with garden to rent in an acceptable residential part of Paphos for €677 per month, which is what the report says is the average!

  • We should consider this index as a starting point – a peg in the ground.

    Also, the apartments and houses used in creating the index are residential properties located in residential areasnot holiday homes in tourist areas designed for the expatriate market.

    Also we must not confuse ‘average quality‘ with properties being sold to the expatriate market that are advertised as being ‘luxury’, ‘executive’, ‘exclusive’, etc – that’s just marketing hype.

    At 250 square metres the house is large compared to UK standards and considerably larger than the houses built for the expatriate market (excluding the Russian market), and if you read the specification you will see it assumes that it has all the necessary planning & building permits and its Title Deeds have been issued. It also has central heating, double glazing, air-conditioning and covered parking.

    Traditionally in Cyprus, young couples are helped financially by their parents and other family members when they buy their first home and until quite recently the bride’s parents would provide the couple with a dowry house. Guests give money rather than gifts at wedding receptions which are often attended by the entire population of the bride and groom’s villages. And many Cypriots build on family land that they already own which means that the price of the land can be deduced from the price of the house in some cases.

    Rental yields are very similar to other independent surveys I have seen – and yes, they are very poor! And they also shows that the Index is not unreasonable.

  • Simon says:

    If one combines the yields stated in this article with the title deeds fiasco, Cyprus has to be possibly the worst residential investment property market in the world at present.

    Anybody willing to part with €450 – €500,000 for an AVERAGE 3 bed house in Cyprus needs to have their head read, alternatively divide the above house prices by 2 for a market related figure.

    I seriously doubt the above given prices are attainable. Check out what €450,000 will buy you in the NE of Brazil by way of comparison, located on beaches which Cyprus can only dream about.

    Mr. Tofarides alludes to the AVERAGE Cyprus salary equating to 1/10 the AVERAGE property price?
    Does the average Cypriot earn €45 – €50,000 pa.?
    Surely not!

  • Jim says:

    I think the residential prices quoted are grossly inflated & unrealistic.
    Sellers cannot get half these amounts.

  • Ian says:

    What total fantasy! if this is adopted all that will happen is that the decline of the island will speed up enormously, please be realistic, is a 3 bedroom semi in Larnaca on a divided island, with already crazy advantages being took by the locals in relation to high prices charged, really worth more that a Brick built top quality house in Surrey.
    No, get real and for gods sake do something realistic to help get this beautiful island back on track.

  • cyprusexpat says:

    A very wecome and much needed independent and professional Property Index! This will provide everybody with a realistic guide to be able to price their properties, look for value in commercial property, rental guides etc.

    The more information people have from independent sources, the less chance of them being mislead in pricing, and help to clean up the awful stigma Cyprus has at the moment regarding Property investment.

    Let us hope that there will be the same professional approach to solve the title deeds fiasco!

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


Back to top