Cypriot property prices down as economy stabilises

P hoto credit:   Eric Parker

The Royal Institution of Chartered Surveyors’ research shows that during the first three months of the year, the island’s economy began stabilising from the impact of the decisions of the Eurogroup on 15 and 27 March to “bail-in” the
depositors of two of Cyprus’ largest banks, to close down Laiki Bank, and to impose capital restrictions.

Nontheless, turbulence in Cyprus’ banking system and poor personal finance conditions kept sales levels low during the quarter, with rising unemployment impacting domestic demand.
The Property Price Index recorded falls in almost all cities and asset classes, with significant falls being recorded in Nicosia and Limassol. Nicosia is clearly feeling the impact on the government and banking sector (the two sectors who dominate the local employment market), while other cities are progressively bottoming out.

Across Cyprus, residential prices for both houses and flats fell by 1.4% and 2.6% respectively, with the biggest drop being in Famagusta (4.0% for houses
and 9.3% for flats). Values of retail properties fell by an average of 1.7%, whilst those of offices and warehouses fell by 1.4% and 0.9% respectively.
Compared to Q1 2013, prices dropped by 10.7% for apartments, 7.8% for houses, 14.8% for retail, 10.4% for office, and 11.4% for warehouses.