articles | 26 February 2016

Cyprus property prices drop in 2015

The Cyprus Property Price Index RICS has recorded falls in most cities and asset classes in the fourth quarter of 2015, though the rate of decrease is less than previous quarters.

According to data released in the 25th publication of RICS Cyprus, across the island the trend in property prices appears mixed as residential prices for flats fell by 0.5% and 0.1% for houses.

The biggest drop was in Limassol (1.4% for flats) and in Nicosia with a 0.8% decrease on houses. An increase of 2.9% for offices was noted in Nicosia.

Values of warehouses fell by an average 2.3%, retail properties remained stable and offices increased by 0.7%.

Compared to Q4 2014, prices dropped by 1.8% for flats, 0.3% for houses, 2.4% for retail, 0.9% for office, and 2.2% for warehouses.

Market Rental Values

Across Cyprus, on a quarterly basis rental values increased by 0.5% for apartments, 1.1% for houses and 0.2% for offices. A decrease of 0.2% for retail units was noted and 1% for warehouses.

Compared to Q4 2014, rents dropped by 3.8% for retail, 2.6% for warehouses and 0.2% for offices. On an annual basis an increase of 0.3% and 0.8% was noted for apartments and houses respectively.

The majority of asset classes and geographies continue to be affected, with areas that had dropped the most early on in the property cycle now nearing or showing some signs of price stability.

Appraisal based initial yields

At the end of Q4 2015 average gross yields stood at 3.9% for apartments, 2% for houses, 5.2% for retail, 4.3% for warehouses, and 4.5%for offices.

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

In addition, certain districts and asset classes indicate signs of stability as Paphos, Larnaca and Famagusta are progressively bottoming out.

Source: InCyprus

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