Data released by the Central Bank of Cyprus show that residential property prices have continued on a stabilising path, recording a small slowdown in their downward trend at the second quarter of 2016.
All other relevant indexes suggest positive prospects ahead according to the Central Bank’s bulletin.
The Residential Prices Index (RPI), which concerns houses and apartments, recorded a smaller quarterly drop (0.5%) compared to the previous quarter (0.8%). Prices for apartments and houses recorded a slight quarterly drop of 0.2% and 0.6% respectively.
“The extremely slight variations recorded by the Residential Prices Index in the last period reflect the market tendency towards stabilisation of residential prices and / or reversal of negative tendencies,” the bulletin points out.
On an annual basis, the RPI fell by 1.7% during the second quarter of this year, compared to an annual reduction of 5.1% at the same quarter of 2015.
House prices fell by 2.1% on an annual basis and apartment prices by 0.4% compared to respective annual drops of 4.6% and 6.3% at the same quarter last year.
Apartment prices increased on an annual basis in Limassol (0.2%) and Paphos (3.3%) as well as house prices in Paphos (0.4%).
At the same time, construction activity continues to show growth while lower lending rates and a stabilisation of credit criteria, as well as other incentives the government offers property buyers have had a positive impact in an increase in demand.
Referring to the prospects of the property market in general the Central Bank’s bulletin recalls European Commission’s economic sentiment surveys which “present a better picture compared to a year ago.”
In particular the index for employment expectation in the construction sector at the second quarter of 2016 was on average at -0.3 compared to -4.1 at the same quarter of 2015. The index for property prices expectations recorded a less negative figure, on average -5.7 at the second quarter of this year compared to -19.6 at the same quarter of 2015.