articles | 02 February 2017

Cyprus' property prices and rents recover in Q3 2016

Flat and house prices rose in July to September 2016 an annual 0.6% and 0.9% respectively, the Cypriot division of the Royal Institute of Chartered Surveyors (RICS) said.

In the third quarter of 2016, prices for offices and retail properties rose 0.9% and 0.8% respectively compared with July to September 2015, RICS said in an emailed statement. Prices for warehouses remained unchanged.

“The property price index has recorded increases in almost all cities and asset classes, with significant increases being recorded in Larnaca area, whilst other cities are progressively bottoming out,” RICS said.

Compared with the fourth quarter of 2009, when RICS launched its property price index, apartments lost 39% of their value in the third quarter of 2016 and house prices fell 28%. Shops lost almost half their value, while warehouse and office prices dropped 38% and 34% respectively.

Compared with April to June, houses and flats became 0.6% and 0.9% less affordable in the third quarter, RICS said. The Limassol district topped all others with a 1.4% quarterly increase in flat prices, while the 1.8% increase in house price in Paphos outstripped all other areas.

The prices for holiday homes, a category introduced the previous quarter applying exclusively to seaside residential properties, also rose in the third quarter, RICS said. Seaside flat prices rose 1.6% while houses rose 0.4%.

The increase in property prices was also reflected in rental prices which in the third quarter rose a quarterly 0.7% in the case of flats, 3.3% for houses, 2.2% for shops, 1.1% for offices and 3.5% for warehouses, RICS said.

The increase in rents was even in the third quarter of 2016 stronger when compared with the respective quarter of 2015, RICS said. Renting an apartment became 5.3% more expensive in the third quarter compared with the respective quarter of 2015 and renting a house was 6.7% more expensive. Office space rents rose 3.5% and those of shops and warehouses went up 3.9% and 2.5% respectively.

“The majority of asset classes and geographies are bottoming out and are showing some signs of price stability,” RICS said.

In the third quarter, average gross yields were 4% for apartments, 2% for houses, 5.4% for shops, 4.4% for warehouses and 4.5% for offices, RICS said.

“The parallel reduction or stabilisation in capital values and rents is keeping investment yields relatively stable and at low levels, -compared to yields overseas,” RICS said. “This suggests that there is still room for some re-pricing of capital values to take place, especially for properties in secondary locations”.

Source: Cyprus Mail

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