According to the results of the tenth publication of RICS (Royal Institution of Chartered Surveyors) Cyprus’ Property Price Index, that were published here Thursday, it has been recorded a disappointing behaviour in property prices across Cyprus’ major urban areas, with prices and rents falling across all districts.
The Index tracks property and rental prices across all districts and main property types.
Overall, Limassol fared the worst as it was the least affected market until the second half of 2011 and the one that has experienced the greater reduction in interest by overseas buyers.
Quarter-on-quarter, residential prices for both houses and flats fell by 2.4% and 2.6% respectively, with the biggest drop being in Limassol (6.5% for apartments and 5.3% for houses).
Values of retail properties fell by an average of 3.0%, whilst those of offices and warehouses fell by 3.1% and 2.1% respectively.
Compared to the first quarter of 2011, prices dropped by 10.8% for apartments, 6.3% for houses, 12.0% for retail, 9.0% for office, and 10.7% for warehouses.
Across Cyprus, rental values decreased by 2.2% for apartments, 2.2% for houses, 1.8% for retail units, 2.8% for warehouses, and 4.3% for offices.
Compared to the first quarter of 2011, rents dropped by 5.7% for apartments, 1.5% for houses, 12.3% for retail, 11.1% for warehouses, and 13.9% for offices.
All asset classes and geographies continue to be affected, with areas that had dropped the most early on in the property cycle now nearing the trough.
According to Pavlos Loizou MRICS, member of the RICS Board in Cyprus during the first quarter of 2012 Cyprus’ economy continued to bear the consequences of the decoupling of the Greek economy and of the “haircut” in Greek government debt.
As he explained, the above had a significant impact as they led to a pronounced slowdown in mortgage and corporate lending and a rise in the rate of unemployment. “The combination of the above, along with uncertainty surrounding Cyprus’ banking system, led to a further slowdown of the economy” he added.
Loizou went on to say that “whilst the first half of 2011 saw some signs of muted economic growth, the second half of the year and the first quarter of 2012 saw investors postpone their decision making. This led to low transaction turnover and reduced interest, especially by local buyers, as they were more affected by the increase in unemployment and the decrease in credit”.
