Cypriot property prices "can only go up"
San Raphael Marina - Limassol, Cyprus Photo: CyprusPictures
The unbelievably optimistic figures arrive as figures confirm the island housing market's downward spiral. According to the Royal Institution of Chartered Surveyors, prices plunged 13.3 per cent (apartments) and 10.5 per cent (houses) in the final quarter of 2013 compared to the same period in 2012. Rents also plummeted 13.3 per cent and 12.3 per cent respectively.
Chris Hajikyriacou, sales director at BuySell Cyprus, acknowledges the data as accurate, alongside statistics from the nation's Central Bank, which show a price drop of 23 per cent from the peak of Q4 2008.
"Given inflated prices during the 2007 to 2008 housing bubble, a price correction of approximately 25 per cent sounds just about right," he told the Cyprus Mail.
The picture is undoubtedly negative: real estate consultant and advisor Danos' latest figures show that prices fell 11.1 per cent (houses) and 14.6 per cent (apartments) in the second quarter of 2012-2013.
The industry is now hoping that increasingly affordable real estate will entice foreign buyers back to the market. Indeed, the country's lifestyle appeal remains strong, backed up by rising tourist numbers from Russia, which offset a decline in visitors from the rest of Europe. Because the Russians spend more during their stay, notes the Economist, tourism income actually rose 8 per cent in 2013.
Nonetheless, the market's condition has not been the most attractive for domestic or overseas buyers. While local buyers are struggling with unemployment and poor finances, overseas investors are deterred by the ongoing confusion surrounding missing title deeds. With the bank also hampered by debt, mortgage lending is not very accessible either.
But there are some signs of confidence in the island's market. Managing Director of Danos, Panos Danos, tells OPP Connect that the market is now recovering, boosted by the appeal of residency permits for non-EU buyers investing more than €300,000.
“The residential market in Cyprus, after three years of falling prices, seems to be stabilising," he says.
Indeed, one project in Limassol is helping to catch buyers' attention, notes Danos: a new Marina, which claims to be the only Mediterranean development with private berths attached to homes, and is expected to complete at the end of this year.
BuySell Cyprus claims that demand has already begun to rebound, with sales up 600 per cent in the first three months of 2014 compared to the same period in 2013. Activity has been driven by buyers from the UK, thanks to the strength of the sterling against the euro, Russia, Scandinavia and the Middle East.
"Property in Nicosia and Limassol is still slightly overpriced, though not in the other districts," adds Hajikyriacou. "Overall, I’d say that nationwide the price correction has gone too far, and as people start getting over the shock of the haircut, values should rise by at least 10 per cent in the next 12 months.”
"Now is the time to buy, otherwise you’re going to miss the boat," he concludes.
Are agents right to feel so confident in the market given the ongoing price declines? Figures from the Department of Lands and Surveys show that sales fell in January 2014 once again, although international sales jumped 18 per cent year-on-year.
Either way, Hajikyriacou is correct: prices can only go up. The question is how long it will be until they do.