Cyprus house prices rise 19.2% in 2007

But slip in December

 

Residential house prices in Cyprus accelerated during 2007 according to the latest results from the BuySell Home Price Index, rising by 19.2% for the whole year compared with 6.6% in 2006.

The BuySell Home Price Index closed at 139.06 units for the year, bringing the Average Home Price in Cyprus to CYP 108,344 (EUR 185,117).

However, they ended the year on a negative note, slipping by 1.9% in December over the previous month.

Although a monthly slip in December is normal for seasonal reasons, this was bigger than the monthly falls recorded in the Decembers of 2006 (-0.4), 2005 (-0.8) and 2004 (-1.5).

 

Acceleration almost all year

 

Compared with the same month of the previous year, house prices in Cyprus accelerated almost every month in 2007, rising by 8.7% year on year in January (or 2.5% compared with the previous month).

They accelerated particularly fast from August, reaching a peak of 21% year on year in November.

One of the reasons cited for the acceleration in house prices this year has been the anticipation of VAT on residential land, initially due in January 2008 but now expected some time after the February election.

The BuySell Home Price Index was created and is updated monthly on behalf of BuySell Cyprus Real Estate by MAP S. Platis. The Index is announced during the second week of each month and depicts the movement of prices at which residential properties are sold in Cyprus, based on the extensive BuySell Cyprus Real Estate database.

For more information on the methodology of the Index and on Hedonic Prices please refer to: The “Asking Price and Transaction–based Indices for the Cyprus Housing Market (Rebased)” by Dr. Stelios Platis and Marios Nerouppos of MAP S. Platis.

Fiona Mullen

www.sapientaeconomics.com