THE TWENTY-fourth edition of the RICS Cyprus Property Price Index issued earlier today reports that the average price of apartments in Cyprus fell by 0.4% and the average price of houses fell by 0.5% over the third quarter of 2015.
Famagusta saw the largest fall in residential apartment prices (-1.2%) over the quarter followed by Nicosia (-0.9%), while prices in Limassol, Larnaca and Paphos were unchanged.
Although residential house prices in Paphos rose 0.6% over the quarter, they fell 3.2% in Limassol and by 0.3% in Nicosia, while remaining steady in Famagusta and Larnaca.
Compared to the third quarter of 2014, the average price of a residential apartment has fallen by 1.9%, while the average price of a 3-bed semi has fallen by 1.3%. Retail property has fallen by 4.0%, while the prices of offices and warehouses have fallen by 2.7% and 1.8% respectively.
Rental values
Across Cyprus, on a quarterly basis rental values increased by 0.3% for apartments, 1.5% for houses and 2.6% for office. A decrease of 1.1% for retail units was noted and 0.1% for warehouses.
Compared to the third quarter of 2014, rents dropped by 1.5% for flats, 0.5% for houses, 4% for retail, 2.5% for warehouses, and 0.2% 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 or at the trough, e.g. Paphos and Famagusta are showing some signs of price stability.
Paphos is the only district with positive returns in all asset classes when compared to the third quarter of 2014.
Gross yields
At the end of the third quarter of 2015 average gross yields stood at 3.9% for apartments, 2% for houses, 5.2% for retail, 4.3% for warehouses, and 4.5% 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.
Prepared by RICS Cyprus in conjunction with the Cyprus Association of Quantity Surveyors (SEEOKK) and the Cyprus Valuers Association (SEEAK), the quarterly RICS index monitors property prices and rents in all districts using a methodology developed by Reading University in the UK.
Residential property prices
Since the first RICS Cyprus Property Price Index was published for the first quarter of 2010 residential house prices have fallen by an average of 30.1%, while those of apartments have fallen 40.6%.
(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.)
