Cypriot Property Prices on the Rebound
As Cyprus heads out of its bailout programme the fall in property prices is bottoming out according to data from the Central Bank of Cyprus residential property prices index (RPPI).
The RPPI recorded a decrease of only 0.3% compared with the previous period in the third quarter of 2015.
Two districts have seen the beginnings of recovery, with prices increasing in the third quarter by 1.2% for Larnaca and 0.2% for Paphos.
"The decrease in prices of houses and apartments price is slowing down," Antonis Loizou, member of the Royal Institution of Chartered Surveyors (RICS), told the Cyprus Weekly.
On an annual basis, however, prices are still down. Overall real-estate prices dropped year on year by 3.7% in the third quarter, down from 5% in the second quarter and 6.5% in the first.
The least affected was Famagusta, with a year-on-year fall of 1.6%. Property prices in Paphos dropped by 2.5%, in Larnaca by 3%, in Limassol by 3.9% and in Nicosia by 5.1%.
According to Loizou, offices in prime locations and projects in touristic area seem to have suffered the least during the market crash that has seen overall prices tumble 31% since their 2008 peak. "Of course these are only a small fraction of the market," he points out.
British expats who used to buy new housing in Cyprus are now looking to buy resales.
"Especially in the Paphos area one can find a real bargain prices for a holiday home," Loizou said. On the other hand, prices for agriculture land and plots is still in decline, driven by the limited demand. "They are the ones that have been affected the most," Loizou says.
With banks lowering interest rates from around 5% to 3%, this could help the market rebound. However, the problem with lending is that, despite the fact that it has become cheaper, mortgage availability has become tighter as well.
Real estate professionals in Cyprus are suggesting that now is the time to buy in the country. With prices considered to be at the lowest point and a consistently thriving tourism sector to underpin investment in its real estate, savvy buyers are surging to check out what's on offer in Cyprus.
