IN ITS ANNUAL report Resolute Asset Management provides a review of the Cyprus economy & real estate market for 2015 and its prospects and expectations for them in 2016:
Property market review
Resolute Asset Management reports that transaction volume rose by around 9% in the first eleven months of 2015 compared to the same period in 2014. It notes that the volume was significantly lower than the peak recorded before the bail-in and recession. Compared to 2007, the number of transactions has fallen by 79%.
Limassol had the highest number of transactions, accounting for 31% of the total volume, while Famagusta (which is heavily reliant on local demand for holiday homes) accounted for just 6% of the total.
According to RICS (Cyprus) residential property prices continued to fall, with the most resilient property types being residential houses, where prices have fallen 4% since 2014 and 30% since the fourth quarter of 2009.
Property market expectations for 2016
Resolute Asset Management expects that transactions volumes will remain at low levels, with prices of prime assets reaching their lowest point during the first half of the year. It anticipates that demand for secondary assets will be almost non-existent and that prices will stabilise.
It is expected that transactions in the property market will remain concentrated on prime assets while overseas buyers, encouraged by the government’s Naturalisation Scheme, will focus almost exclusively on high-end residential properties (over €300,000).
Capital Values – 2016 Forecast
|Housing Plots||(-) 5-10%|
|Commercial Plots||(-) 10-15%|
|Offices||Cat A (+/-) Stable|
Cat B (-) 10%
|Apartments||Centre (-) 10%|
Secondary locations (-) 10%
Touristic locations (-) 10%
|Shops||Centre (-) 5-10%|
Secondary locations (+/-) Stable (thin volume)
Touristic locations (+/-) Stable (thin volume)
|Fields||(-) 10-20% (lack of demand)|
Institutional investors are scarce and are only interested producing income from their investments such as grade A properties and/or sizeable parcels of land with potential for tourist developments.