Prices fell by up to 8.1% year on year, the Cyprus branch of the Royal Institute of Chartered Surveyors (RICS) said. In the third quarter the rate was 9.6%.

The slump began in 2009 with the bursting of a real estate bubble that had been stoked by cheap credit and foreign demand after the island joined the European Union in 2004 and all restrictions on property ownership by foreigners were eased.

Market demand has been sapped by a liquidity squeeze since the island took a €10 billion international bailout in 2013 and its banks suffered billions in losses from their exposure to fellow bailout recipient Greece.

Falling prices have left a significant proportion of homeowners with debts exceeding the value of their property, and the rate of non-performing loans in the island’s banking sector is above 50%.

RICS said its property price index had recorded falls in almost all Cypriot cities and asset classes, with significant drops in previously more resilient Nicosia.

“Other cities are progressively bottoming out,” it said in a statement.

Source: Cyprus Mail