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Dramatic fall in Cyprus property prices

Over the past year residential house prices in Cyprus have fallen by 7.8 per cent while apartment prices have fallen 10.7 per cent, according the RICS Cyprus Property Price Index for Q1 2014.

The RICS Cyprus Property Price Index, which reports quarterly on real estate values and rents in the major urban areas of the island, reveals that property prices on the island continued to fall over the first quarter of 2014.

Across Cyprus, prices of residential houses and apartments fell by 1.4% and 2.6% respectively during the first quarter of 2014.

Famagusta saw the biggest drop with house prices falling by 4.0% and apartment prices falling 9.3%. Across the island the values of shops fell by an average of 1.7%, while those of offices and warehouses fell by 1.4% and 0.9% respectively.

Annualised property price changes

Compared to the first quarter of 2013, the average price of a residential apartment has dropped by 10.7%, while the average price for a house has fallen 7.8%

Commercial property prices have fallen even more dramatically, with the price of retail units falling 14.8%, while the price of offices and warehouses have fallen by 10.4% and 11.4% respectively.

Gross rental yield

Gross rental yields recorded a quarterly drop of 1.4% for apartments, 1.6% for houses, 1.3% for shops, 3.1% for warehouses, and 1.2% offices.

Compared to the first quarter of 2013, rental yields have fallen 11.3% for apartments, 12.6% for houses, 23.3% shops, 15.3% for offices and 14.0% for warehouses.

RICS Cyprus Property Prices Index

Commenting on the figures MRICS Chartered Surveyor Charalambos Petrides said “it seems property sales in 2013 hit rock bottom but it’s clear that in 2014 real estate sales will move upwards.”

But he said property values are expected to continue on a downward spiral for the first six months with the exception of real estate in prime locations.

Outline of properties used to calculate the index

Apartments: Residential, two bedroom, 85sqm, Medium quality.

Houses: Residential, three bedroom with garden, Semi-detached, 250sqm, Medium quality.

Retail: High-street retail, 100sqm ground floor area with 50sqm mezzanine.

Warehouse: Light industrial area, 2,000sqm, which includes 200sqm office space.

Office: Grade A, City centre location, 200sqm

(All property types used to calculate the index are: freehold, have all licences and permits in place, have their Title Deeds, are subject to VAT and are in a good state of repair).

Monitoring Process

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

Methodology

The methodology underpinning the RICS Cyprus Property Price Index was developed by the University of Reading UK and may be viewed by clicking here.

Readers' comments

Comments on this article are no longer being accepted.

  • Phil says:

    Yes those with property, wanting to get out, are stuck in a big crater, some more so than others. Even those like me who has full and clean title deeds to their property know full well that selling is all about luck and how much you are willing to sell for, rock bottom price, not what the land registry believe its worth in order to capitalize on taxes.

    Then of course you have to be extremely lucky to find a cash buyer, banks not lending, who is willing to pay your asking “rock bottom price” as sure as eggs are eggs your rock bottom price will not be meet with a smile just a silly counter offer that would not even be worth considering.

    So what is the purpose of this comment you might well ask. The Russians have gone, the Chinese never came, the Brits have been shafted so no more of them and the locals keep their heads down for obvious reasons.

    So all in all I don’t care what the RICS report because the bottom line is “TRUST AND HONESTY IS A TWO WAY STREET”. Unfortunately the later has never ever been available in Cyprus, free or otherwise.

    Phil

  • Steve says:

    Nigel,
    Plenty of stuff in London for a lot less than £300k and you get the deeds as well !!
    Bonus.
    The current planning process in the uk automatically gives a plot / potential building plot value because the process supply is tightly controlled.
    Not the case in Cyprus where it’s possible to build virtually anywhere, especially when the extended family all pull together !!
    Steve

  • @Steve – you’d be lucky to get a dog kennel in London for £350k. There’s a nice 3 bedroom house for sale in Regents Park – going for a song at £9,250,000.

  • Steve says:

    These properties are way overvalued, indeed as you would expect them to have been.
    3 bed semis @ €350k. Please !!!
    its not London and it never will be.
    It would have cost between €1000 to €1200 per square metre to build, thats complete with bathrooms wardrobes etc , to a reasonable spec as well, fully fitted ready to move in.
    Problem was the land was and still is way overvalued, and that’s being factored into these overblown figures. Land in Cyprus, Spain etc has NO VALUE unless someone wants it for a specific purpose. Super market, petrol station, brother in law lives next door etc.
    Prices still have a long way to go before things turn the corner. England and Western European property values need a substantial uplift before people feel comfortable about releasing equity to fund a foreign purchase and that’s a long way away.
    Interest rates will rise from their historic low either before the uk general election, or very shortly after. That will in turn place further pressure on hard pressed households thereby delaying any recovery even further.
    It’s going to be a long haul and I think Cyprus needs to look east not west to achieve any kind of recovery in the housing market.

  • Denton Mackrell says:

    @Basura. Fair dinkum, I think we know each other from your Oroklini days before you went to Oz around 2009! I recognize the tag and the patter.

    You are right about Cyprus generally. Gone are the golden years when property prices were buoyant – now it’s only a question of hoping to peg the 30-50% price drop so far. All that is selling in Oroklini now after no sales for 5 years are re-sales with title deeds at under 200k Euros. There are still the abandoned ‘new builds’ and ‘grey builds’ going back 5-7 years. BTW, they still haven’t finished off the roadway from the corner next to your old house.

  • Basura says:

    Having lived and escaped in both Spain 1 year and Cyprus 4 years, I remember the one constant phrase that applies to both these countries.
    “To make a small fortune in Spain/Cyprus you must go in with a large one”

    Basura- The one who got away with his shirt still intact!

  • aggis demetriou says:

    Dear reader

    Please understand, march 2013 was a grand theft by the banks and the government allowing this to happen, who on earth would want to invest a $ on this crippled Island?

    Mobil Energy as you may know have pulled out of Cyprus, there simply is not enough gas for them to invest in, even these guys know Cyprus is doomed.

    I’m sure dear reader Cyprus was an expensive hole where money just disappears from your pockets, in Cyprus there is not enough population to go round and most unemployed, even if you try and sell your property 40% cheaper than 2011 price you will fail year after year.

    Cyprus has nothing to offer.

  • aggis demetriou says:

    Methodology:

    The university of life which is a tried and tested method by me tells me you cant sell anything here, nobody will buy any property without a title.

    Residential property has fallen 40% if your lucky to even make a sale at this level, property in Cyprus is a deep hole and will never recover, there are too many muppets in government who know nothing from nothing, only to line their pockets.

  • MartynG says:

    You have to be brave to argue with RICS, but then this is the Cyprus branch! Based on ‘on the ground’ evidence I’d say most sales achieved are showing 40-50% drop from 2009 ‘values’ and in most areas, most market sectors are still falling. And why does their Chairman think June-July ’14 will show the start of a recovery? The banks haven’t really started to tackle the un-serviced (or under-serviced) mortgages, loans etc, repossession of the ‘basket cases’ will have to start sometime fairly soon, placing yet further downward pressure on values: then there are the massive stocks of unsold, in many cases unfinished properties properties still to be cleared – who has been putting values on those? Maybe some people see the re-emergence of Buy Sell Cyprus as an indicator of some kind of positive turnaround in values, but to me it seems BSC are simple re adopting their kite-flying tactics and many of us therefore would not see that firm and others like it being anything like a true barometer of property price and values at the present time.

    Yes, a few bargain-hunters are out and looking around but these, often liquid, punters are likely for some time yet to simply drive the main market sectors further downwards. I’d say it’ll be some time yet before the Cyprus property markets reach ‘rock-bottom’, start to move up, and then quite slowly climb out of the multi-factored recession that has been raging, continues to rage, for several years yet.

  • @hani chehaiber – All the domestic banking restrictions have been lifted – only the restriction on transfers out of the country remain in place.

  • @hani chehaiber – Many lawyers have set up overseas client accounts to enable property transactions to take place outside Cyprus. But any money that came into Cyprus after the banking restrictions were imposed can be taken out of the country.

  • Costas Afortune says:

    And with all the negative publicity that is appearing in the English national press and all over the internet, it’s not surprising a fall in property prices. Certain banks, developers and lawyers are causing horrific problems for this once beautiful and trusted island. Cyprus has caused it’s own implosion of property prices. Even if the prices dropped by 50% most Brits would not touch this island now.

  • Deanna says:

    Looking at their valuation of a 3-bed semi in Paralimni I would say they are way over the top of what people are now prepared to pay – even with TDs.

  • hani chehaiber says:

    Can you tell me why the proceeds of any sale of property taking place is settled in London or Beirut banks! Is this what the Cypriot banks want. Wake up

  • hani chehaiber says:

    The fall in prices will continue as long as long as bank restrictions are in place, this is what I warned about before! The banks will find them selves sitting on property that is worth nothing because of their ignorance. Then everybody Will go bankrupt.

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

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