Property prices in Cyprus continue falling
February 11, 2015 - Cyprus
Residential property prices in Cyprus continued to fall in the final quarter of 2014 but some local agents are reporting an increase in sales.
Average price of houses fell by 1.1% and apartments by 0.7%, according to the latest index from the Royal Institute of Chartered Surveyors (RICS).
The country’s property market was particularly badly hit during the global economic downturn of 2007 and since the RICS index was first published in 2010 house prices have fallen by an average of 30% and apartment prices by 40%.
The largest quarterly falls were in Famagusta where house prices fell by 3.6% and in Nicosia where apartment prices were down 1.1.
Compared to the fourth quarter of 2013, the average price of an apartment has fallen 5% and the average price of a three bed home is down 5.4%.
RICS said that sales have rebounded but prices are expected to continue falling in 2015. The situation is not helped by a strict lending regime following the island’s banking crisis and high interest rates.
‘The market is affected by increased property taxes and the issue of foreclosures on mortgaged properties, preventing the market from stabilising,’ said a spokesman.
Rental values are also still on a downward trend, with house rents down 0.2% and apartment rents down 1.3%.
According to local property firm Fitzgerald Marketing, sales increased by 20% in 2014 compared with the previous year, but it is local people who are buying again as the international market has not really picked up since the global economic downturn.
The firm believes that as property prices have reduced significantly, up to 40% in popular areas such as Paphos, buyers could be keen to grab themselves a bargain in 2015.
It is thought that with the discovery of oil and gas fields in Cypriot waters, as oil companies set up their offices thousands of workers will arrive in two to three years, all in need of homes.
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