THE TWENTY second edition of the Cyprus Property Price Index published by RICS (Cyprus) reveals that the average price of apartments fell by 0.4%, while house prices rose by 0.6% during the first quarter of 2015.
The largest quarterly fall for apartments was reported in Limassol (-1.0%), while the largest rise in house prices was reported in Larnaca (3.0%).
Although house prices in Nicosia continued to fall they remained steady in Limassol and Famagusta – and those in Larnaca and Paphos rose slightly and while apartment prices in Nicosia, Limassol and Larnaca continued to fall, they remained steady in Paphos and Famagusta.
Values of retail premises fell by an average of 1.7%, value of offices fell 0.1% and the value of warehouses rose 1.3% over the quarter.
Compared to the first quarter of 2014, the average price of a residential apartment has fallen 3.2% and the average price of a 3-bed semi has fallen 3.0%. Retail property has fallen by 8.1%, offices by 4.8% and warehouses by 3.2%.
Commenting on the latest figures, Charalambos Petrides MRICS, said “The positive thing seen in the first quarter of 2015 compared to 2014 and 2013, is the 20 per cent increase in marketability on an annual basis,” adding that “It seems that property transactions have recovered and the drop in prices is restoring market activity.”
Mr Petrides expects that property prices will continue to fall during the year but at a slower pace than 2014 due to pending developments in the financial sector related to non-performing loans, foreclosures and stricter loan standards in the banking system.
Rental values
Rental values recorded a quarterly drop of 0.3% for apartments, 1.9% for offices, 0.4% for retail units and 0.1% for warehouses. On a more positive note, the rental value of houses rose 1.2%. 0.2% for houses.
Compared to the first quarter of 2014, rents have dropped 4.0% for apartments, 1.2% for houses, 8.1% for retail premises, 3.5% for offices and 5.9% for warehouses.
Gross yields
At the end of first quarter of 2015 average gross yields stood at 3.8% for apartments, 2.0% for houses, 5.3% for retail, 4.3% for warehouses, and 4.4% for offices.
The parallel reduction in capital values and rents is keeping investment yields relatively stable and at low levels (compared to yields overseas). This suggests that there is still room for some re-pricing of capital values to take place, especially for properties in secondary locations.
Professional bodies contributing to the Property Price Index are RICS Cyprus, the Cyprus Association of Quantity Surveyors and Construction Economists (??????), and the Cyprus Association of Valuers and Property Consultants.
Characteristics of the properties used to compile the index and the methodology employed was developed by the University of Reading, UK. The document may be viewed by clicking here.
Overall property price falls
Since the first RICS Cyprus Property Price Index was published for the first quarter of 2010 residential house values have fallen by an average of 30%, while those of apartments have fallen 40%.
(Note that the RICS Price Index does not include prices of holiday homes and all properties used to construct the index have clean Title Deeds.)