Although non-performing loans had fallen by €180 million at the end of January compared to the previous month, as a percentage of total loans the figure remained the same at 47.2 per cent.
Residential property prices will fall by 4.0 percent in 2014, while real estate prices in general are predicted to go down by 11.9 percent under the EBA's pan-European stress test scenarios.
Although housing loan interest rates continued to fall in December, business loan rates increased reversing an earlier downward trend according to the latest statistics from the Cyprus Central Bank.
In the wake of the island's financial bailout, property prices in Cyprus are anticipated to fall according to the chairman of the Property Valuers Association which has temporarily suspended work.
Assumptions made by PIMCO that property prices will decline by a further 30 to 40 per cent this year have been rejected by the Cyprus Association of Valuers and Property Consultants.
House prices in Cyprus registered one of the largest falls in European countries according to the latest edition RICS European Housing Review and prices are predicted to fall further in 2012.
The scale of the recession's damage to the overseas property market in Cyprus has been revealed by official figures that show an 84% drop in sales to non-Cypriots since peak.
The chairman of the Cyprus Land & Building Developers Association has said that there is no margin for making further cuts in property prices and that external demand may improve if Cyprus overcomes the problem with Title Deeds.
The drop in Cyprus tax revenue collections is entirely attributable to the collapse of the property market and it raises concerns that if foreign demand fails to recover, the government will lose a significant source of revenue permanently.
At the recent real estate conference the Cyprus Interior Minister, Neoclis Sylikiotis, said the failure to process 130,000 title deeds snared in the system was tarnishing Cyprus’ reputation among foreign investors.
To compete in the international property market, Cypriot developers must address issues such as escrow deposits, Title Deeds, planning and bank guarantees.
The ever increasing number of unsold apartments and houses in Cyprus is placing a heavy financial burden on the developers. As well as having to service their mortgages, developers have to pay for the maintenance and upkeep of their unsold properties.
