House prices rose in October to December 2015 by 0.5% compared to the third quarter while apartments became 1.6% more affordable, the central bank said in a statement on its website. Home prices fell in the third quarter a quarterly 0.3% after falling another 0.4% in the second quarter.

Home prices rose 2.4% in the Famagusta area in October to December compared to July to September and 0.4% in Paphos. They remained unchanged in Limassol, fell marginally in Larnaca and 0.5% in Nicosia.

House prices remained unchanged in Nicosia in the fourth quarter compared to the third and rose in all other districts with the highest increases seen in Famagusta and Paphos where they rose 2% and 1.4% respectively. Apartment prices rose 3.6% in Famagusta and fellin all other districts. In Nicosia and Larnaca flats lost 1.6% of their value while in Limassol and Paphos losses were more contained.

In the fourth quarter of 2015, home prices fell an annual 1.8% after falling an annual 3.7% and 5% in the third and second quarter respectively. The most extensive drop in home prices was the 3.3% reported in Nicosia, followed by Larnaca’s 1.8%, Limassol’s 1.6% and Paphos’ 1.2%. Home prices in Famagusta rose 1.5%.

“The economy continues to shows signs of recovery with gross domestic product recording positive growth rates,” the Central Bank of Cyprus said. “Improved domestic economic and financial conditions are expected to have a positive impact on the real estate sector”.

The central bank said that an increase in property demand is reflected in the 19% annual increase in property transactions in the fourth quarter, with the number of foreign property buyers rising as much as 25%.

“The increased demand is supported by various favourable financial factors,” including the drop of mortgage rates to an average of 3.34% in the fourth quarter of 2015 compared to 4.39% in the respective quarter of 2014, the central bank said.

“In the fourth quarter 2015, there was an increase in demand for mortgages by households and is expected to further increase in the first quarter of 2016,” the supervisory authority said. “Mortgage standards remained unchanged and are expected to remain unchanged in the first quarter of 2016 in while demand for loans increased”.

According to the central bank’s data series which stretch from 2006 to 2015, the current house price level is comparable to that of the first year. Prices for apartments fell already below the 2006 level.

Source: Cyprus Mail