Property prices and rents are still spiralling downwards as few properties are changing hands in Cyprus due to fall out from the Mediterranean island’s banking crisis, says the Royal Institution of Chartered Surveyors.
The latest RICS survey of property prices shows a drop across the board – regardless of location or property type.
Worst hit is the largest city and capital Nicosia which is bearing the brunt of government cuts and the banking crisis as once well-paid staff lose their jobs.
Elsewhere, housing and jobs markets are not much better, but do not rely mostly on public sector and banking salaries.
Across the island, says RICS, the price of houses dropped 1.6%, while flats fell in value by 0.5% in the last three months of 2013. Nicosia saw the largest decline in the value of apartments, down 6.8%, while house prices lost most value in Larnaka, which saw house prices reduce by 1.4%.
Double digit drops
Commercial investors are also suffering from declining property values. Retail unit prices declined 3.2%, offices by 1.4% and warehouses by 0.7%.
Year-on-year rent comparisons all show miserable double digit loss in values for investors and owners
- Apartment prices down 13.3% in the year and 1% in the past three months
- House prices down 10.5% and 1.3% in the past three months
- Retail units down 19.8% and 3% in the past three months
- Offices down 12.8% and 1.6% in the past three months
- Warehouses down 15.4% and 1.4% in the past three months
“Most types of properties across the island are affected, but those that dropped prices and rents earlier in the cycle are nearer the bottom of the trough than others,” said the RICS report.
“The only place where values and rent are stable seems to be Famagusta, which showed a marginal increase in both.”
The RICS report points out that the economy in Cyprus started to stabilise after a bail-out from the Eurozone.
“The impact of this event is still rippling through Nicosia, where bank staff were sacked, general unemployment increased and salaries were cut,” said RICS.
“As a result fewer properties changed hands, mainly because of the troubles in the banking system. Local buyers without the cash available to non-residents lacked confidence in buying because they could not predict their financial futures and even those that wanted to buy could not because they could raise a mortgage or a deposit.”