articles | 03 September 2014

Decline in house prices slows down

House prices across Cyprus have recorded the smallest quarterly decline (2%) in the last five quarterly periods (from March 2013) according to the Cyprus Central Bank.

The central bank said that the slowdown for the second quarterly period affected all districts of the island.

Paphos and the Famagusta district were unaffected when it came to apartment prices.

The ongoing economic slowdown – driven by the island’s banking crisis - has affected local consumer demand, including potential property buyers, while the tightening of lending criteria has also taken its toll. 

The deleveraging has in turn reduced housing loans by some €419 million for June this year when compared to the same month last year. According to the house pricing index, prices are down by 9.1% while apartment prices are down by 8.9%.

Some encouraging figures released by the central bank showed that for the second quarter of 2014, home purchases (by both Cypriots and non-Cypriots) shot up by 65.1% all over the island when compared to figures from the second quarter of 2013. 

According to figures of the Royal Institute of Chartered Surveyors (RICS), prices of residential houses and apartments fell by 1.1% and 1.0% respectively during the second quarter of this year. 

The same figures showed that the biggest decline was in Paphos, where house prices fell by 2.1% and apartment prices fell 2.8% over the quarter. Across the island the values of retail properties fell by an average of 3.0%, while those of offices and warehouses fell by 2.2% and 2.6% respectively. 

Last year, house prices fell 10.5% (-8.7% inflation-adjusted) while prices fell 0.5% (-0.35% inflation-adjusted) on a quarterly basis.
The largest decline last year was recorded in Larnaca, with prices falling 15.2% (-13.4% inflation-adjusted) to an average price of €281,400 while in Nicosia, house prices fell 14.4% (-12.6% inflation-adjusted) to an average price of €407,115.

Source: InCyprus

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