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Fourth highest fall in house prices

Although house prices have gone through the roof in most of the 52 countries listed in the latest IMF Global Housing Watch report, house prices in Cyprus suffered the fourth highest fall.

house-prices

Sources: OECD, Global Property Guide, Haver, and IMF calculations

CYPRUS recorded the fourth highest fall in house prices during the 4th quarter of 2013, according to IMF’s Global House Price Index.

The index is based on data from the Organisation for Economic Cooperation and Development (OECD), the International Monetary Fund (IMF), Global Property Guide and Haver Analytics.

According to the report, the highest percentage fall was recorded in India with -9.1%, followed by Greece with -7.0%, Italy with -6.5%, Cyprus with -6.5% and Croatia with -6.3%.

The highest increase in house prices during the fourth quarter of 2013 were recorded in Philippines (10.6%), Hong Kong (10.3%), New Zealand (9.1%), China (9.1% ) and Colombia (8.1%).

The index shows also data for house prices historical averages in relation to incomes and rents.

House prices remain well above the historical averages in relation to incomes in Belgium (+49.5%), in Canada (+33.2%), in Australia (31.6%) in New Zealand (29, 7%) and in France (28.6%).

The cheapest houses in relation to the income recorded in Japan (-40.6%), Korea (-39.6%) and Germany ( -16.8%). .

The highest increases in house prices in relation to the total cost of renting were record in Canada (86.8%), New Zealand (80%) and Norway (66.5%). The highest decreases were recorded in Japan (-37.8 %), Estonia (-17.7%) and Greece (-16.3%).

– Cyprus News Agency

Further reading

International Monetary Fund Global Housing Watch

Readers' comments

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  • Denton Mackrell says:

    @Andrew. Yes, I forgot to mention that with all the sales I am aware of the Title Deeds were in possession of the vendor.

  • Andrew says:

    @ Denton Mackrell, that is good news indeed that buyers in your area have been found for re sale properties. I wonder though if the homes sold did have title deeds transferred to the new buyer. Or did the deception simply continue, with the purchasers unaware or unconcerned by the problem. Maybe hidden debts got conveniently overlooked by lawyers yet again.

    Without doubt far too many properties have been ridiculously overpriced in Cyprus in recent years. It appears that some agents/sellers were oblivious to the global downturn. Some took the opportunity to almost double prices when the Cyprus pound changed to Euro.

  • Peter Davis says:

    It is no use blaming the banks, developers and lawyers.

    The Government makes laws which prohibit deception, theft and mugging in every area, save screwing home buyers.

    Blame the Government. The fault lies at their feet.

    I had hoped that Troika would have ‘kicked ass’ but they appear not to understand the problem or are totally inept when they say “Cyprus is doing well (save for the €26-27 billion black hole at the banks which we don’t know about).

    I noticed the case in the UK got settled and withdrawn at the 11th hour, God forbid there should be a ruling by a proper law court on this subject.

  • Denton Mackrell says:

    It’s not rocket science. The price correction was inevitable and some argue it has not yet bottomed. The reasons are not down to a single factor or single group of rogues here but the toxic combination of all of them has been lethal.

    @Andrew. Buyers, certainly for new properties, are indeed staying away. However, there is a definite move in the resale market for properties under Euro 200k. In our village alone, I am aware of 8 in the last few months after none for several years. Most of these properties had been up for sale for 5 years and their prices had been reduced by 30-40%.

    Buyers seem to be an even mix of ex-pat retirees, overseas Cypriots returning, Russians and Nicosia Cypriots seeking a weekend place by the sea. A glimmer of hope, perhaps, but it does indicate that over-priced properties will not sell regardless of level-of-trust issues.

  • David says:

    The simple reason is a lack of trust in any part, person or system involved in the sale (new or resale) of property in Cyprus.

    The Russians/Chinese (read cavalry) are coming !!! No they are not and neither are any half sensible Europeans.

  • Andrew says:

    How do you value and then try to sell a house, where the first buyer is yet to receive clean title deeds?

    It is obvious that new buyers can now see through the Cypriot real estate shambles. The result is few new sales and even less re sales.

  • John Swift says:

    Pippa, the Cyprus property problem is down to one single group of people, the conveyancing lawyers, in any civilised country they would have been struck when it first started instead of being able to continue.

  • Martyn says:

    Pippa
    I agree but you’re No 4 should be No 1 including the government

  • MartynG says:

    I agree totally with Hani and Pippa below.

    One, just one, of the contributing factors to the massive slide in property prices and the current Dearth of market ‘traction’ was that the previous government remained in complete Denial for 5 years whilst clearly countries elsewhere were tackling problems, introducing broad ‘work-out’ solutions, seriously tackling the excesses of previous years of sloppy lending, poor control, poor leadership and control in many banks and lending institutions, weak Regulation.

    Yes there must be an opportunity for a Private Bank to come in, doing things differently, doing things right:

    Many of the things Pippa lists are, sadly, culturally ingrained and will take considerable time as well as difficult cultural shifts before some of the key contributing factors to the present unholy mess can be addressed:

    * a government committed and determined to fundamental and long-term change,
    * honest lawyers, ruthlessly monitored within a much tighter property development and funding and control system
    * retrained and reprogrammed bank managements and lending personnel working to sensible lending parameters : sensible, structured property loans and terms
    * completely overhauled Land Registry and Title Deed issue systems
    * stringent Regulation to prevent any of what’s happened over the last 20 years ever happening again

    IF some of the above can be achieved, none look very likely yet, then maybe just maybe a completely fresh approach can be achieved but it’s going to take time, a lot of time given current pedestrian progress to date – and very hard-to shift cultural blockages in so many of the above areas.

  • Pippa says:

    Perhaps some of the reasons may be lack of:

    1- Title deeds at time of sale
    2- Realistic home loans
    3- Free movement of money
    4- Honest lawyers
    5- The will by this, and every other Cypriot Government, to acknowledge the property gravy train has left the station and is not returning until all corrupt and devious practices have been expunged.

  • hani chehaiber says:

    As long as the banks do not give home loans, prices will keep falling and the banks collateral on mortgages will go down. So the sooner lending starts the sooner prices will start to stabilize. Solution open a new private bank that has nothing to do with the old ones.

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

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