Cyprus’ economy showed some signs of stability in the third quarter of 2014, with unemployment at a stabilised (yet record high) 17-18 per cent, while the Bank of Cyprus raised €1 billion to shore up its capital base.
Sales, though, were slow, as the increase in unemployment and the prospects of the local economy sapped interest from domestic buyers. Furthermore, those interested were unable to access bank-finance or their deposits, notes the Royal Institution of Chartered Surveyors.
As a result, the property price index continues to record falls in “almost all cities and asset classes”. Across Cyprus, residential prices for both houses and flats fell by 1.6 per cent and 1 per cent. Significant falls were recorded in Nicosia (3.4 per cent for houses) and Limassol (1.5 per cent for flats), while other cities are “progressively bottoming out”.
Compared to the same period 12 months ago, prices fell 6.3 per cent for flats, 4.4 per cent for houses, 9.6 per cent for retail, 6.3 per cent for office and 4.2 per cent for warehouses.
Rental values for apartments fell 1.2 per cent on a quarterly basis, 0.9 per cent for houses, 3.2 per cent for retail units, 0.4 per cenet for warehouses, and 0.9 per cent for offices. On an annual basis, rents dropped by 4.7 per cent for flats, 4.1 per cent for houses, 11.2 per cent for retail, 9.2 per cent for warehouses and 4.6 per cent for offices.
“The majority of asset classes and geographies continue to be affected, with areas that had dropped the most early on in the property cycle now nearing the trough,” says the RICS.
At the same time, though, previous figures have shown positive signs within the sales sector, as overseas buyers step up activity and take advantage of low prices.
Indeed, in August 2014, sales jumped 26 per cent year-on-year, according to the Department of Lands and Surveys, with transactions in favour of international buyers up 33.2 per cent.