The forty-third publication of the RICS Cyprus Property Price Index reports that the average price of residential apartments and houses across the island fell over the second quarter of 2020.
During the second quarter of 2020, the Cyprus economy continued to decline, with a seasonally adjusted quarterly GDP change of -11.6% and an annual seasonally adjusted GDP change of -11.9%. This is likely due to the effects of the COVID-19 pandemic becoming more apparent in Cyprus during the second quarter of 2020, after a nationwide quarantine lockdown that was set into motion in March 2020.
Quarterly property price changes
Compared with the first quarter of 2020, prices of residential houses and apartments fell by 0.93% and 0.46% respectively. Larnaca recorded the largest fall in house prices; down 3.39%, while Nicosia recorded the largest fall in apartment prices; down 1.51%.
The value of holiday homes also fell over the quarter with houses and apartments falling by 0.06% and 2.97% respectively. Limassol recorded the largest fall in house prices; down 4.29%, while Larnaca recorded the largest fall in apartment prices; down 1.33%.
Annual property price changes
On an annual basis, apartment prices rose by 0.67%, house prices rose 1.01% and office prices rose 0.13%. However, warehouse prices 0.15% and retail premises by 0.38%.
Rental values
On a quarterly basis rental values increased by 0.67% for apartments, 1.01% for houses, 5.7% for retail, 5.1% for offices and by 4.3% for warehouses.
On an annual basis, rents increased by 0.5% for apartments, 0.8% for houses and offices. However, retail premises fell 1.2% and warehouses fell 0.8%.
Gross rental yields
At the end of the second quarter of 2020, average gross rental yields stood at 4.8% for apartments, 2.5% for houses, 5.7% for retail, 4.3% for warehouses, and 5.1% for offices.
The gross rental yield is a useful yardstick as to whether property is over-valued, under-valued or priced correctly. Here is a set of rules of thumb for the housing market from the Global Property Guide: