RESIDENTIAL property prices have fallen for the sixth consecutive quarter, with apartment prices in the coastal resorts losing 18% of their value over the past year, according to the latest quarterly report from the Central Bank of Cyprus.
The Bank’s report, for the second quarter of 2011, shows that the crisis in the real estate market is continuing; a recovery is not expected before 2013.
During April, May and June of this year (before the devastating Mari blast that killed 13 people and destroyed the Vasilikos Power Station) house and apartment prices fell by 0.9%.
House prices in Paphos fell by 2.3% during the second quarter, while those in Nicosia fell by 0.2%. Apartment prices in the seaside towns also fell, with Famagusta being the worst hit area, while those in the Island’s capital, Nicosia, appear to have stabilised.
On an annual basis, prices have fallen by 4.9%, according to the Central Bank. These falls are mainly attributable to the drop in apartment prices of 6.5%, while house prices have fallen by 3.7%.
Over the past twelve months, Paphos has suffered the biggest fall in apartment prices (-18.4%) followed by Larnaca (-10.8%).
Property valuer Polys Kourousides believes that property prices will continue to fall. He said “I believe that the drop in property prices will continue in the next one and a half years unless something drastic changes things. There seems no positive sign”.
In his statements to StockWatch Lakis Tofarides, the chairman of the Cyprus Land and Building Developers Association, questioned the validity of the figures and stressed that it is about isolated data which does reflect the reality of the situation. “The game with the price declines hit a record low, there is no other decline”, he concluded.
Further information and explanations on the methodology used for the construction of the various price indices can be found in the Central Bank’s methodology report (English)
(The seventh issue of the RICS Cyprus Property Price Index, which tracks property prices and rents across 46 locations in Cyprus, is due to be published in the next few weeks).