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25th May 2022
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Property price falls reduce

Property price falls reduce THE LATEST housing price index (houses and apartments) from the Cyprus Central Bank reports a fall of 1.8% in property prices during the fourth quarter of 2014, with the house prices falling 2.1% and apartment prices falling 1.5%.

However, on an annual basis, the housing price index recorded a fall of 8.2% in the fourth quarter compared with a fall of 8.9% in the third quarter indicating that the fall in prices may be slowing.

The largest quarterly decline in prices was recorded in Famagusta (-2.6%), followed by Nicosia (-2.1%) and Limassol (-2%); while prices in Larnaca and Paphos fell by 1% and 0.6% respectively.

The largest annual decline in prices was also recorded in Famagusta (-10.4%), followed by Nicosia (-8.2%) and Larnaca (-7.75%); while the annual falls in Limassol and Paphos were 7.5% and 3.7% respectively.

According to the Central Bank, residential property prices are now at levels last seen in 2006, two years before the bubble burst.

(Property prices in Spain, where their property bubble also burst, are currently at levels last seen in 2003 according to data from the European Central Bank.)



  1. I really cant get my head around where the Central Bank gets the figures from, I sold a property in January 2015 for 6% higher then a sale I done in 2014 being the same property size and on the same complex.

    There is so few sales happening that you really can’t get the figures correct, If you have something of a nice quality you will sell no matter what and at a high price, the fall of the Euro is a good thing for anybody selling to any overseas buyers especially British ones.

    The market here is so small it can turn at any moment but in my humble opinion this will take at least another 7/8 years to get to 2010 values.

    Anyone with a bit of noddle will invest in the UK where the laws are implemented, personally I’m done with the Cyprus building industry especially having to wait 8/9 years for titles is just a joke and that’s for an honest developer.

  2. New builds off plan selling for more?

    Could this be that the bank are willing to give a loan to buyers on these properties to help their developer friends..even if no deed is available.

    Where as they are reluctant to loan 75-90% on re sales (even if they have a deed).

    • @AJWC on 2015/03/02 at 4:32 pm – The banks are lending money to buy homes. Following from the Bank of Cyprus:

      If you are a permanent resident and buying your first permanent home that is already built or you are building yourself you can borrow a maximum of 80% of the property’s value.

      If you are a permanent resident and buying a holiday home (completed or under construction) you can borrow a maximum of 70% of the property’s value.

      All the banks are being much more stringent when assessing the risk and the borrower’s ability to pay.

      The banks, as far as I am aware, will not offer anything more than 70% of the property’s value.

  3. Sorry to hear that Ryan. There are some horrible stories like yours and of course estimates of selling prices are pure guess work until the house is sold. We are waiting for title deeds that we expect to get later this year; then we can test the market!

    My post was aimed at the extraordinary assertion by the Central Bank that prices had dropped to 2006 levels; I just can’t believe that. I think they have dropped far more than that as your post confirms.

  4. @ Peter Howard

    I made a mistake about what I said about Madrid property prices. It was down 4.8 % in 2014 according to the article I read.

    The 26% rise I mentioned was for new building permits not prices. The article I read does state that Barcelona prices are up 2.4% in 2014 and in some areas even up to 8%. It affirms what you said that the rest of the market is in decline.

    I doubt the average apartment in Larnaca is selling for only 30% less than 2007. I have heard of 50-60% discounts for most apartments in Larnaca other than the ones being sold to wealthy non EU investors looking to park some cash and gain an EU residency permit.

    @ Clive
    “There is also the bizarre situation where new builds “off plan” with no landscaping seem to sell for a lot more than a mature resale with mature garden etc..”

    You are right this seems weird. Anyone have any ideas as to why this is happening? Nigel?

    • @Mike G on 2015/03/02 at 1:21 pm – Why are new builds selling at a higher price than resales? (1) In my experience most people want a new property and they therefore demand a higher price (2) Non-EU nationals wanting a residency permit will only get one if they buy a new property.

  5. Well you are all very lucky if you only had a 30% loss in value! We bought a new two bed apartment in Oroklini, June 2007 for 150k euros. Real Estate agents tell me I would only get around 65k euros now! That’s 60%. When is it going to stop?

    • @Ryan Davies on 2015/03/02 at 2:11 am – Is yours a holiday apartment? I’m afraid that you bought close to the peak of the market and there are thousands of holiday homes on the market at the moment. Prices will recover eventually, but it will probably take a few years.

      At least you didn’t buy in Greece. Prices there have fallen to levels last seen in 2001.

  6. How can the Central Bank say house prices are at 2006 levels? We can only dream of that it would be fantastic.

    We paid 410,000 euros (240,000 CYP) for a villa at Secret Valley in December 2005 and spent a further 25,000 euros (15,000 CYP) on the garden and extras.

    If we could sell it for anything like that I think I might consider running round Paphos naked!!! The current likely selling price is probably 375,000 absolutely top whack.

    There is also the bizaar situation where new builds “off plan” with no landscaping seem to sell for alot more than a mature resale with mature garden etc..

  7. Mike G

    I totally agree with you when it comes to a drop in land prices – as nobody is buying land, at any price.

    If you know many people that are now getting offers at 75% less what they were valued at in 2007 – I would suggest that they had unrealistic expectations at that time. Some apartments are selling at 50% of their previous value, but generally these are on a large complex without Deeds. A 75% drop is not normal.

    Regarding Spain – official figures show that during the year to Q2 2014:

    In the Capital and Large Cities, house prices dropped 4.8%, a large improvement from annual declines of 11.5% in Q2 2013, and 13.5% in Q2 2012

    On the Mediterranean Coast, house prices dropped 7.1%, an improvement from annual declines of 7.5% in Q2 2013, and 13.3% in Q2 2012

    The figures quoted in the article above, show that the annual decline in Paphos to be 3.7%

    All official figures, to date, show that we have had a serious decline in property prices – but not as severe as other Mediterranean countries.

    • @Peter Howard on 2015/02/28 at 11:50 am – A couple of days ago I gave a seminar in Limassol. One of things I did was compare the ECB Residential Property Price Indices of Cyprus and Spain (below).

      ECB Residential Property Price Index

      At the end of 2014, property prices in Spain had fallen to the levels they were at Q3 2003, while those in Cyprus had fallen to the level they were at Q3 2006.

      So although residential property prices in Cyprus have fallen, the drop hasn’t been as severe as in Spain.

      Incidentally, if you look at the Bank of Cyprus Property for Sale website, the overwhelming majority are for land.

  8. @ Peter Howard

    “Be pleased that you are in Cyprus where prices have dropped by about 30%. In Portugal it is estimated to be 35%, Spain 40% and in Ireland 50%.”

    I know many people who are only getting offers at 75% less than the estimates and offers they received in 2007. If I could sell my plot (now my co-owners finally want to sell too I told them back in 2007 they would) for even 50% less I would jump at it.

    Parts of Spain are up over 30% over the last 2 years specifically Madrid. Ireland is also recovering. I would say that Cyprus is the worst affected property market in the world.

  9. @ Nigel

    I think there are plenty waiting in the wings. From what I’ve read the most likely are hedge fund companies, pension providers etc. who are in it as a long term investment and take advantage when the market recovers. Many of these companies specialise in taking over distressed properties.

    I would expect that you are correct that the first in line will be strategic defaulters with properties in prime locations.

    The interesting challenge will be to find investors willing to get involved in buying properties with no deeds, Tax encumbrances and memos in place and inhabited with “beneficial owners” with proof of payment.

    I suspect and indeed hope that this category of properties maybe unique to Cyprus and thus present a particular challenge to most of these companies.

  10. Nigel

    i totally agree with you and interesting to note that the Bank of Cyprus today has stated: Problematic housing loans represent just 9,4% of its total non-performing loans of €12.7bn and only 10.2% of their total non-performing loans in Cyprus.

    This would indeed suggest that large developers are their main problem, although there are many smaller ‘developers’ who have simply disappeared.

    I am lucky being based in the Polis area where there is good demand for all types of property, developments tend to be quite small – but I fear for the many very large apartment developments in places like Kato Paphos. From my experience this is where many of the UK defaulters have problems – a sad legacy of the high pressure companies offering Inspection Trips, with low deposits, ‘low cost’ Swiss Franc mortgages and an ‘Independent’ lawyer.

    I am very positive about the property market in Cyprus – except for these large apartment blocks, where many owners cannot pay their mortgages or communal fees – maybe future slums – unfortunately.

  11. When you look at any part of the world where massive foreclosure practice took place you will notice that the number 1 victim is the regular John, the average home owner is the one that get all the heat due to a lot of different reasons. Whoever thinks that foreclosure will stabilize the market is dead wrong, unless Cyprus is so magical that it is so different from any of those places suffered from foreclosure. Simply, foreclosure means that banks repossess real estates to guarantee their money, they don’t take what the property owner has already put in into consideration, it actually gets worse because they have the property owner pay the foreclosure fees.

    Let’s look at things from a realistic prospective, Cyprus is no better than the U.S., Italy or Spain. In today’s market you can buy a 3 bedroom house in any of those countries for $100,000.

    Cyprus has to be realistic and know that it’s no better than the market in any part of the world. My word to anyone (including my parents) that are underwater due to a property purchase in CY, It will get A LOT worse. So wait until the storm is gone, or sell today (if you are lucky enough to find a buyer) and get the hell out of there if you can’t afford it.

  12. The grass is always greener !! It is indeed very sad that people who have bought properties during the boom years, are loosing money – but this is the property market in any country !! it has happened in the UK before and in the USA.

    Be pleased that you are in Cyprus where prices have dropped by about 30%. In Portugal it is estimated to be 35%, Spain 40% and in Ireland 50%.

    There is a school of thought that says that after the Foreclosures Law is passed, prices will in fact stabilize not drop as many people are thinking. The law, hopefully passed soon, would seem to suggest the banks will be chasing the big developers, not individuals – and then hopefully reducing some of these non performing loans.

    When this happens the banks will then be in a position to start offering loans and mortgages again – which will be a massive boost to the property market. I understand that already the Hellenic Bank are planning to start offering mortgages soon.

    I believe that there is already pressure on the major developers to put their house in order. I have noticed that many developers are passing the management of developments onto private contractors – usually with a price drop in the management fees. Some of the developers like Aristo are obtaining Title Deeds for their developments at a much faster pace than was the case in the past.

    All official figures show that sales are increasing and that the drop in prices is slowing down, and starting to stabilize. Not good news for the ‘doom merchants’ but good news for people desperate to sell their property.

    • @Peter Howard on 2015/02/27 at 4:06 pm – I believe the first target for the banks, when the foreclosures law is eventually passed, will be the ‘strategic defaulters’ – those who can pay their loans but are currently refusing to do so. I’m sure will include a number of developers.

      As for individual properties, I can see the banks foreclosing on those that can be sold relatively easily. High quality properties in prime locations that will achieve a high price.

      The problem as I see it are the poor quality holiday apartments – why would any investor want to buy them? No-one’s buying and there are plenty of rental properties available. I can’t see any investor buying them unless they intend to hold onto them until the market improves.

  13. As Sam (26 Feb at 8:26 pm) has said it’s not over yet but at least its heading in the direction of realism. It certainly still has a long way to go. We must however feel for those who were seduced into buying at stupid and unrealistic prices who now will be facing a massive loss, assuming they bought for anything other than providing a home for themselves. If kept as a home it I suppose it really doesn’t matter what it cost I guess and if bought to launder money again I guess it doesn’t matter. Those who need to sell to return to their home countries for family or medical reasons will sadly feel the loss; A lesson to everyone perhaps.

  14. The bubble isn’t burst yet in Cyprus. Wait until the forclosure law passes and you will see the dramatic change in real estate prices.

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