Residential property prices fall by 10% in towns and cities in Cyprus

[Nicholas Wallwork]

Residential property prices in towns and cities in Cyprus have fallen by more than 10% as the real estate downturn spreads beyond the prime tourist areas, according to local industry experts.

Lakis Tofarides, president on the Cyprus Land and Building Developers Association said that the global financial crisis has not only seen holiday home prices plummet but had a knock-on effect on the local housing market.

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[Cornholio]

Interesting survey results............

Property prices ‘distorted by local factors’
By Charles Charalambous and Sebastian Heller
Published on February 11, 2010

THE HIGH prices of property in Cyprus – especially houses compared to apartments – are caused by a range of distortions in the local market, according to views canvassed by the Cyprus Mail.

According to the first results of the new quarterly Cyprus Property Price Index (PPI),launched by the Royal Institution of Chartered Surveyors (RICS) Cyprus two weeks ago, low yields – the annual rental income from a property compared to its market value – strongly suggest that the market is overvalued.

Professor Patrick McAllister of the School of Real Estate and Planning at the University of Reading (UK),who was one of two academics commissioned by RICS Cyprus to develop the methodology underpinning the PPI, said at the index’s launch:

“What is striking is that yields on commercial property are quite low by European standards, but also hugely variable, even within Cyprus.

“Yields on residential property, for example 1.7 per cent in Nicosia, are also extremely low. These incredibly low yields suggest that people pay over fifty times the rent [to purchase] a property. That would be a strong signal of a market being overvalued.”

Yield is just one of many tools that can be used to provide a snapshot of the strength of a property market at a given moment. If a property is valued at €100,000 and its rental income per year comes to €5,000, then the yield on that property is five per cent.

The results for the first quarterly RICS PPI gave an average unit price of €523,438 for a medium-quality three-bedroom, semi-detached, 250sqm house with a garden in Nicosia. An average monthly rent of €729 for such a house would give a yield of just under 1.7 per cent, in other words one would have to pay around fifty times the annual rental income to buy it.

On the other hand, the average unit price of €171,155 for a medium-quality two-bedroom, 85sqm apartment in Nicosia would give a yield of 3.9 per cent, based on an average monthly rent of €560. This is much closer to the normal EU range of 4-7 per cent yield, suggesting that it is mid-range houses that are over-valued rather than all residential property.

Property prices ?distorted by local factors? - Cyprus Mail

 

[Cornholio]

Update............

House prices fall in first quarter while office prices go up
By Jean Christou
Published on May 20, 2010

HOME PRICES fell on average 4.5 per cent islandwide in the first quarter of 2010, the second issue of the new Property Price Index showed yesterday.

The index is compiled by the Royal Institution of Chartered Surveyors Cyprus (RICS),in collaboration with the Association of Scientists Economists Building Surveyors Cyprus.

It tracks property and rental prices across all districts, and monitors changes in residential (apartments and houses),offices, high street retail, and warehouses.

The index showed that while house prices fell 4.5 per cent in the first quarter, apartment prices dropped only 1.6 per cent in the same period.

The biggest drop in prices was in Larnaca, where home prices plunged 6.8 per cent. The average cost of a home there is now €409,000, the lowest from the main towns. The average cost of a house in Nicosia – the highest – was €520,000.

“The beginning of 2010 finds Cyprus affected by the global economic crisis. The economy experienced a slowdown, there is a decline in government tax revenues, and a significant decrease in real estate transactions,” said Pavlos Loizou, a board member of RICS Cyprus.

“This latter phenomenon is due to reduced activity by foreign investors – and 80 per cent reduction between 2005 and 2008 – and the limit on loans from the banks and other financial institutions for property purchases.”

House prices fall in first quarter while office prices go up - Cyprus Mail

 

[Cornholio]

Update............

Home price slump in slowdown
Published on September 10, 2010

HOUSE prices in Cyprus fell at a slower pace in the second quarter of 2010, with locals starting to make a reappearance on the property market, data from the RICS Cyprus property index showed yesterday.

“Towards the end of the second quarter there were some early signs of stabilisation, with local buyers returning to the market taking advantage of lower prices for holiday homes,” said RICS in its third-ever index.

The RICS index is compiled by the Cyprus branch of the Royal Institution of Chartered Surveyors and Cypriot chartered quantity surveyors.

The results showed that home prices fell on average 2.5 per cent from April to June, compared to a 4.5 per cent drop in the first quarter of the year.

Residential prices for both houses and flats fell by an average of 2.5 per cent, with the biggest drop for houses in Paphos at -4.0 per cent, and for flats in Paralimni -3.3per cent.

Values of commercial properties generally fell across all cities by an average of 0.5 per cent for retail and 2.1 per cent for offices.

Home price slump in slowdown - Cyprus Mail

 

[charis]

Limassol Prices are steady noe

Well, prices at least in Central Limassol are steady. Local buyers prefer qulity and modern constructions. This of course means higher prices because you are over pay the luxury addtions. I have a lot of discussions lately with developers, and they say that things are not as bad as last year. However banks require 30% down payment and this is what makes Cypriots not to be able to buy a new house.