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24th May 2022
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HomeProperty NewsIreland, Cyprus & Bulgaria slump in house prices index

Ireland, Cyprus & Bulgaria slump in house prices index

ESTABLISHED IN 2006, the Knight Frank Global House Price Index tracks the performance of fifty-one of the world’s mainstream housing markets. The index is compiled on a quarterly basis using official government statistics or central bank data where available.

The latest issue, for the third quarter of 2011, showed zero growth over the three months to September. This was the index’s weakest performance since the second quarter of 2009 and raises fears that it could enter negative territory by the end of the year.

According to Knight Frank the boom conditions experienced between 2004 and 2007, when global housing markets recorded double-digit annual price growth for 16 consecutive quarters, are a distant memory.

Perhaps not surprisingly, Ireland experienced the largest annual fall in property prices with a drop of 14.3%. Amongst other EU countries, prices in Cyprus have fallen by 6.6% and those in Bulgaria by 6.1%.

Source: Extract from Frank Knight Global House Price Index

Looking forward, Knight Frank believes that house prices are likely to show little improvement in the final quarter of 2011 given that much of the unravelling of the eurozone sovereign debt crisis took place post-September and has yet to be reflected in the index results.

Another factor that has yet to be reflected in prices in Cyprus is the impact of the explosion at the Evangelos Florakis Naval Base at Mari, which killed 13 people and devastated the Vasilikos Power Station.

Further reading

Frank Knight – Global House Price Index (Q3 2011)



  1. WOW Richard finally an intelligent comment on this forum ! Housing investment is for the long term – too many people have invested in countries like Cyprus hoping to make a quick ‘buck’ in two or three years! For the longer term investor, Cyprus will still be a very good investment! Many people on this forum get excited when they see that property sales or prices have dropped in Cyprus – but unfortunately, at the present time this applies to most of Europe and the USA.

    As for only obscene investors buying houses, for profit – in Cyprus and in other places including the UK there are many people who rent property, either by choice, or for financial reasons. If investors did not buy property for profit – who would supply these rental properties ?

  2. Steve comments:

    Houses are for living in and the way the markets have been pushed up by “investors” looking for a quick buck is actually obscene.

    Whilst I partly agree with your sentiments Steve (and particularly when the money to fund them has been made in ‘less than savoury’ ways). However – the way in which many of them are sold – is not so much a quick buck but a replacement to pension plans and money in the bank (which if we look at the last few years – not performed brilliantly).

    Pension funds, the church and millions of investment funds globally rely on property – so to castigate anyone owning a house they don’t actually live in all the time as ‘obscene’ is a bit harsh.

    In our case – we purchased for a long game. I’d seen the value of more ‘normal’ investment alternatives to property collapse, recover a bit, plunge, go up a bit again etc over a 20 year period and thought it was probably time to take a little more control of our future.

    Cyprus is an island (always invest in islands) and the weather was good, there was a nice stable holiday trade, a brisk rental market from ex-pats working over in Cyprus and the weather is much nicer than in the UK – especially for older people wanting to retire. On top – money (back in those days) went further than in the UK.

    What we didn’t know – was how vulnerable & potentially easy to de-stabilise the investment was. The € coming in hasn’t helped at all – and neither have the combined mis-information and corruption of traders, banks, lawyers and Government – though let’s not go there again – there is more than enough on the forum about all of that.

    Property is a long game – if you aren’t prepared to wait 15 years – then I’d suggest to anyone – it’s not for them. I’ll totally grant the last 3-4 years have been ‘something else’ in terms of the world’s economies (and as a learning experience for those of us who were gung-ho in purchasing property in Cyprus) – but with the Arab spring reforms – and much more wealth now coming out of Asia – these quarterly trends on property rises/falls across various European regions is largely meaningless.

    On the ‘poll’ – I’m a bit surprised this time at the questions posed. Surely the diversity of regions across the island and type of property means it’s almost nigh-on impossible to give such a range of black & white answers?

    On the same poll – what conclusions are we supposed to be reaching at the end?

    On top – countries like France are doing well right now. Good if you purchased in France. But now France is commercially downgraded and it will cost more for the French Government to borrow money – what impact will that have on France and French society? Will it stay that way with + growth?

    I think to keep looking at short-term data on property is probably in danger of plunging us into ‘The Daily Mail’ syndrome – where every few weeks (when a Royal isn’t getting married or dressing up in a politically incorrect costume) and news stories of any magnitude dry up – out trots some M.I.P.P (Meaningless Indication of Property Prices).

    What’s far more interesting to me is looking at the trends around the long-term economic pillars of wealth that would make any region or country more desirable than another – be that hard fiscal data, or underlying cultural shifts that could impact hard fiscal performance in the future.

    That’s what I think this forum is really about – looking for those golden nuggets and dismissing everything else as “f.u.d” that really isn’t impacting the long game.

  3. If you adjust for inflation the figures look even worse and, to be honest, I don’t think it’s too much of a bad thing.

    Houses are for living in and the way the markets have been pushed up by “investors” looking for a quick buck is actually obscene.

    The whole house buying/selling industry has gone overboard in the recent past and it’s time people started buying houses to live in rather than to make money. And that includes Cyprus too.

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