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4th December 2021
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RICS reports quarterly property price falls

The forty-third publication of the RICS Cyprus Property Price Index reports that the average price of residential apartments and houses across the island fell over the second quarter of 2020.

During the second quarter of 2020, the Cyprus economy continued to decline, with a seasonally adjusted quarterly GDP change of -11.6% and an annual seasonally adjusted GDP change of -11.9%. This is likely due to the effects of the COVID-19 pandemic becoming more apparent in Cyprus during the second quarter of 2020, after a nationwide quarantine lockdown that was set into motion in March 2020.

Quarterly property price changes

Compared with the first quarter of 2020, prices of residential houses and apartments fell by 0.93% and 0.46% respectively. Larnaca recorded the largest fall in house prices; down 3.39%, while Nicosia recorded the largest fall in apartment prices; down 1.51%.

The value of holiday homes also fell over the quarter with houses and apartments falling by 0.06% and 2.97% respectively. Limassol recorded the largest fall in house prices; down 4.29%, while Larnaca recorded the largest fall in apartment prices; down 1.33%.

Annual property price changes

On an annual basis, apartment prices rose by 0.67%, house prices rose 1.01% and office prices rose 0.13%. However, warehouse prices 0.15% and retail premises by 0.38%.

Rental values

On a quarterly basis rental values increased by 0.67% for apartments, 1.01% for houses, 5.7% for retail, 5.1% for offices and by 4.3% for warehouses.

On an annual basis, rents increased by 0.5% for apartments, 0.8% for houses and offices. However, retail premises fell 1.2% and warehouses fell 0.8%.

Gross rental yields

At the end of the second quarter of 2020, average gross rental yields stood at 4.8% for apartments, 2.5% for houses, 5.7% for retail, 4.3% for warehouses, and 5.1% for offices.

The gross rental yield is a useful yardstick as to whether property is over-valued, under-valued or priced correctly. Here is a set of rules of thumb for the housing market from the Global Property Guide:

Further reading

RICS Cyprus Property Price Index Q2 2020

1 COMMENT

  1. Remember the heady days of 2004 – 2007 when Cyprus was a new member of the EEC, now called the EU. Property prices were rocketing. Then came two disasters: the economic global banking collapse and the election of the communist AKEL party with the disastrous premiership of Demetrias Christofias, proud to be called the red sheep of Europe. New property buyers in those three golden years mentioned above could not sell without title deeds and by the time their title deeds were issued, 10 years or more later, the values of those properties were down on average by 50% or more. The brave souls who hung on have been rewarded with further falls in value. The current rises of around 1% are peanuts compared to the accumulated losses: a 50% loss requires a subsequent 100% gain, just to break even. Now many owners in countries in COVID category 3 cannot even enter the country to occupy their property, but still they pay all the associated expenses. God help them if they also have car expenses for an unused vehicle gathering dust.

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