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Cyprus Property - RICS Cyprus Property Price Index Q2 2011

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Information for Cyprus Expats on the price and trends of Cyprus property

Limassol Marina

This is the seventh publication of RICS Cyprus’ Property Price Index, a quarterly price and rental index which is based on methodology produced by the University of Reading, UK. The Index tracks property and rental prices across all districts and main property types.

Introduction & Commentary

During the second quarter of 2011 Cyprus’ economy and banks in particular, bore the consequences of the decoupling of the Greek economy. This led to a loss of optimism as discussions by parliamentarians and government officials escalated as to the measures that the government should take in order to reduce its expenditure.

Whilst the first quarter saw some signs of price stabilisation and muted economic growth, the second quarter saw foreign investors postpone their decision making as companies, funds, and individuals took a“wait and see” approach. In turn this led to a low transaction turnover and to reduced interest by local buyers as they were affected by the increased tension
between government and parliament.

Market Capital Values
The Property Price Index has recorded a disappointing behaviour in property prices across Cyprus’ major urban areas, with prices and rents falling across all districts.

Average residential prices for both houses and flats fell by 1.0% and 2.7% respectively, with the biggest drop for both taking place in Larnaca (-3.2% for houses and -7.2% for flats). Values of retail properties fell by an average of 4.4%, whilst those of offices and warehouses fell by 2.2% and 1.7% respectively.

Compared to Q4 2009, prices dropped by 15.1% for apartments, 9.9% for houses, 12.2% for retail, 9.0% for office, and 6.4% for warehouses.

Market Rental Values
Across Cyprus, rental values for apartments fell by 3.1%, for retail units 4.1%, for warehouses 5.4%, and offices 2.0%. In contrast, rents for houses rose by 1.3%.

Compared to Q4 2009, rents dropped by 11.6% for apartments, 12.4% for houses, 13.2% for retail, 7.2% for offices, and 8.8% for warehouses.

The quarterly change in capital and rental values shows that all aspects and geographies of the property market are now affected, and that landlords are lowering their rents in order to attract tenants.

Appraisal based initial yields
At the end of Q2 2011 average yields stood at 3.6% for apartments, 2.0% for houses, 6.1% for retail, 4.6% for warehouses, and 4.8% for offices. The parallel reduction in capital values and rents is keeping investment yields relatively stable and at very low levels (compared to yields overseas). These suggest that there is still room for rebalancing to take place.

Further information may be found here

Source RICS Cyprus

Reduced VAT On Cyprus Property   Department Of Land And Surveys Citizens Charter

CYPRUS INFORMATION  BUSINESS DIRECTORY   CYPRUS PROPERTY LISTINGS   TRANSLATIONS

PROPERTY FINDERS SERVICE   MARKETPLACE CLASSIFIEDS   UK BUSINESS DIRECTORY  

FEATURED ARTICLES   PRESS RELEASE SERVICE   FEATURED BUSINESSES  UK BORN CYPRIOTS

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