Property prices continue to fall in cyprus

Photo: Sergey Yeliseev

The Royal Institution of Chartered Surveyors' report for the fourth quarter of 2013, reveals that property prices fell in "almost all cities and asset classes".

Residential prices for both houses and flats on the island fell by 1.6 per cent and 0.5 per cent respectively, with the biggest drop being in Larnaca (1.4 per cent) for houses and in Nicosia (6.8 per cent) for apartments.

Values of retail properties fell by an average of 3.2 per cent, alongside offices (1.4 per cent) and warehouses (0.7 per cent).

Year-on-year, residential property values have now plummeted 13.3 per cent for apartments and 10.5 per cent for houses.

Rentals have dipped too, dropping 13.3 per cent compared to the fourth quarter of 2013 for apartments and 12.3 per cent for houses.

"The figures arrive as the Cyprus 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," notes RICS.

With the decisions sparking a further fall in employment and wages, local buyers are finding themselves increasingly unable or unwilling to invest in the property market. That slump in demand helped to keep transactions down at the end of 2013.

The majority of asset classes and geographies continue to be affected by the downturn, with areas that had dropped the most early on in the property cycle now nearing the trough, adds the report. Properties in Famagusta district, though, recorded a "marginal increase" in both prices and rents, as the market there appears to be stabilising.