Cyprus house prices see biggest decline in EU

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House prices in Cyprus recorded an annual fall of 1.4% in the third quarter of 2020 marking the biggest drop in the European Union, official data shows.

Cyprus not only had the biggest annual fall in house prices in Q3 but also the biggest dip on a quarterly basis (-4.8%) and third-largest fall in the EU over the decade since 2010.

The House Price Index (HPI) for Q3 2020 reached 104.21 units.

Compared to Q2 2020, the HPI decreased by 4.8% while compared to the Index of the same quarter of 2019, the Index decreased by 1.4%.

In the previous three quarters, the HPI recorded quarterly increases of 0.8% in Q4 2019, by 2.5% in Q1 2020 and 0.3% in Q2 2020.

It recorded an annual drop of 0.5% in Q4 2019, an increase of 1.1% in Q1 2020 and an annual drop of 2.9% in Q2 2020.

In Europe during Q3, 2020, house prices rose by 4.9% in the euro area and by 5.2% in the EU compared with the same quarter of the previous year.

In Q2 2020 house prices rose by the same annual rates, 4.9% and 5.2% respectively.

Compared with Q2 2020, house prices rose by 1.3% in the euro area and 1.4% in the EU in Q3.

The highest annual increases in house prices in Q3 were recorded in Luxembourg (+13.6%), Poland (+10.9%) and Austria (+8.9%) while prices fell in Cyprus (-1.4%) and Ireland (-0.8%).

Compared with the previous quarter, the highest increases were recorded in Hungary (+5.2%), Denmark (+4.2%) and Latvia (+3.7%).

Decreases were observed in Cyprus (-4.8%), Romania (-2.6%), Italy (-2.5%) and Croatia (-0.6%).

According to Eurostat, between 2010 and Q3 2011, house prices and rents in the EU27 followed similar paths.

Since Q3 2011, they have followed very different paths: while rents increased steadily throughout the period up to Q3 2020, house prices have fluctuated significantly.

After a sharp decline between Q2 2011 and Q1 2013, house prices remained more or less stable between 2013 and 2014.

There was a rapid rise in early 2015 since then house prices have increased at a much faster pace than rents.

Between 2010 and Q3 2020, rents increased by 14.6% and house prices by 26.8%.

When comparing Q3 2020 with 2010, house prices increased more than rents in 16 EU Member States.

House prices increased in 23 Member States and decreased in four with the highest rises in Estonia (+105.1%), Hungary (+92.2%), Luxembourg (+90.5%), Latvia (+83.6%) and Austria (+81.3%).

Over the decade, decreases were observed in Greece (-31.0%), Italy (-15.5%), Cyprus (-7.7%) and Spain (-4.5%).

For rents, the pattern was different they fell in Cyprus where everywhere else, except Greece, they went up.

When comparing Q3 2020 with 2010, rental prices increased in 25 EU Member States and decreased in two with the highest rises in Estonia (+136.6%), Lithuania (+106.9%) and Ireland (+62.2%).

Decreases were recorded in Greece (-25.2%) and Cyprus (-4.5%).