Local buyers help Cyprus property market

Lower prices and improving economic conditions helped slow falls in Cyprus house prices in the second quarter of 2010, according to new figures from the Royal Institute of Chartered Surveyors (RICS) Cyprus property index.

The index is compiled by the Cyprus office of RICS and Cypriot chartered surveyors.

Local buyers returning

The RICS index said, “Towards the end of the second quarter there were some early signs of stabilisation, with local buyers returning to the market taking advantage of lower prices for holiday homes.”

The research showed that property prices fell, on average, by 2.5 per cent from April to June, compared to a 4.5 per cent drop in the first quarter of the year.

Rental values for apartments rose marginally across the country by 0.3 per cent, while rents on houses fell by an average of 2.1 per cent.

Regional variants

The average figures do not tell the complete story in the country.  The RICS index found that some areas (such as the capital Nicosia) continue to see stable prices and rents whilst other areas (many coastal cities) continue to suffer. 

Rents for all property types fell in Paphos "probably indicating the continuing woes of the city", the report added. Rents in Limassol, except for warehouses, also decreased - a sign that the tough property market is now beginning to affect the city.

Demand from overseas investors falls 

Demand for Cyprus homes fell among Britons and Russians as a result of the economic slowdown in their domestic economies, the RICS survey showed. Property sales to overseas investors slumped in 2008 and 2009, particularly in coastal areas popular with tourists. 

Whilst the better property news was welcomed, RICS added that the early positive signs needed to be viewed within the wider context of banks continuing to tighten the availability of mortgages and people’s desire to hold overseas property as an investment.

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