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Monday 12th April 2021
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PIMCO’s property price assumptions rejected

THE CYPRUS Association of Valuers and Property Consultants has rejected assumptions made by PIMCO that property prices will fall a further 30% – 40% this year.

PIMCO applied these assumptions to help determine the recapitalisation needs of the banks as part of its due diligence review of the island’s banking sector; in its baseline scenario property prices will fall 30%, while in its worst case scenario they will fall 40%.

In a statement, the Association said that “Projections on property values are rather difficult to make, based on the current uncertainty in the global and local financial market.”

“Changes in property values between 2009 and 2012 vary considerably, depending on the district, region and even specific property, unlike a general approach used by PIMCO in its forecasts for the next three years” the statement said, and gave some evidence of changes in value of properties over the past three years:


  • House and apartment values have fallen by up to 20%, while building plots have seen a 15% drop in value
  • Commercial properties in the city have fallen by 10%.
  • Property values in the suburbs – Dhali, Tseri, Deftera – have fallen by up to 30%.


  • Limassol property values were more or less in line with those in Nicosia while the values of large residential and commercial projects on the beachfront were slightly down.


  • The values of houses and land in tourist areas fell by up to 30 per cent, while apartment values have fallen by 40 per cent.
  • Commercial property values have fallen by an estimated 25:; those in tourist areas have fallen 30%.
  • In rural areas, property values have fallen 40%.


  • The situation with properties in Famagusta is similar to those in Paphos, with the values of houses and building land falling up to 30% and those of apartments falling by 40%.
  • Commercial property values have fallen 25%.


  • Property values in the urban area of Larnaca have fallen by 25%, while the value of houses and apartments in tourist areas such as Dhekelia and Pervolia have fallen 35%.

The statement noted that “the Cypriot real estate sector is going through a recession which is reflected on the real estate sales which has been in decline since 2009,” adding that the decline will intensify.


  1. It will be interesting over the next 2 years, given the stipulation in the Troika MoU, to see what valuations are used to calculate Title Deed Transfer taxes by those nice people in the District Lands Offices.

    Historically there seems to have been a tendency by DLO Staff to, let’s say ‘over-inflate’ or ‘disbelieve’ sales contract prices in order to collect more tax revenue, (and possibly other income), but with the plethora of negative data about the future values of properties declining rapidly, maybe this ‘good game’ has run its course.

    Of course, this does not mean that ‘artfulness’ is dead, and there will be twists and turns ahead, no doubt.

  2. The CAVPC represents people who, previously, have placed high valuations on property so as to facilitate very large loans and mortgages.

    Generally that is what the developers and banks still want. It makes a loan that is really under water look still secure, even if the borrower in is breach of the terms.

    The trouble is that the policy has suited buyers too, who have been encouraged to take out large mortgages by these optimistic valuations.

    You would not expect the valuers to do anything else now. Like the government, they are just doing what they are paid to do.

  3. I cannot understand why some people are in such a strong denial.. it’s a bubble and its deflating. Putting yourself in the way and trying to stop it will not make any difference. This is what the association of valuers is doing and they are just sacrificing their credibility and will make a fool of themselves once the PIMCO scenario materializes.

    If you appraise the properties in Cyprus with any modern appraisal technique you will very easily conclude that even PIMCO’s scenario might be optimistic. During a buildup a bubble is self reinforcing on the way up, meaning that you buy a property only on the premise that prices will rise and you will sell you property for a higher amount and not because the income of investing in a property is worth it. Prices are not rising now and will certainly not rise for the next 3-5 years so this premise is not longer valid.

    So from an income perspective, the rule of the thumb is that the value of the property is 10-12 times the value of the annual income. So lets say a good, new or almost new, 2 bed apartment in Limassol rents out for 500 euro at the moment (note: even rents are currently falling so 500 euro is also optimistic) you have an income of 6000 euro per year. 6000 x 12 is 72000 euro. This is the price for a new 2 bed apt. Since prices at the moment are usually in the range of 130000 to 160000 for an average 2 apt in Limassol then easily someone can assume that there is more than 40% way down, I would think is more likely to be a 50%-65% down, like it happened in Ireland and Spain.

  4. “Projections on property values are rather difficult to make, based on the current uncertainty in the global and local financial market.”

    Which is probably why the Association has decided not to make any!

    Other than ‘the decline will intensify’

    What a Windbag statement this is!

  5. What a load of poppycock. Prices in Limassol are down at least 30/40% on 2009 prices especially in the over 600,000 Euro brackets….

    If only 20% then my house is for sale now!!!!!!!

  6. As I use to tell my students, quoting from Huckleberry Finn in Tom Sawyer,

    “…Just you saying it’s so, don’t make it so”

  7. Perhaps the Cyprus Association of Valuers and Property Consultants could give us their views on how the fact that there are circa 130,000 Property Title Deeds still outstanding, which are being denied to their rightful ‘owners’, has affected the Cypriot property market?

    Do they think that this scandal on an Island with a population of around 850,000 people has had a positive or negative effect on the Cypriot property market, especially given that a large number of foreigners who have purchased Cypriot property over the last 15 years are amongst this 130,000?

    Is this too insignificant for them to mention?

    Oh, I forgot, coffee break is over, back onto your heads and lower deep into the sand.

    Ignorance and denial is bliss!

  8. Even King Canute proved to the wishful thinkers surrounding him that he couldn’t hold back the tide.

    As per usual in Cyprus, nobody can face up to reality. Are PIMCO or the Cyprus Association of Valuers likely to be believed? No contest.

  9. All the Association has said to back up their rejection of the PIMCO forward estimates is provide some historical data. Not very convincing. Moreover, if they reject PIMCO’s estimate of a further 30-40% fall in 2013, what exactly is the Association’s estimate? Have I missed it?

    Sounds like wishful thinking to me.

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