HOUSE prices in Cyprus fell at a slower pace in the second quarter of 2010, with locals starting to make a reappearance on the property market, data from the RICS Cyprus property index showed yesterday.
“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,” said RICS in its third-ever index.
The RICS index is compiled by the Cyprus branch of the Royal Institution of Chartered Surveyors and Cypriot chartered quantity surveyors.
The results showed that home prices fell on average 2.5 per cent from April to June, compared to a 4.5 per cent drop in the first quarter of the year.
Residential prices for both houses and flats fell by an average of 2.5 per cent, with the biggest drop for houses in Paphos at -4.0 per cent, and for flats in Paralimni -3.3per cent.
Values of commercial properties generally fell across all cities by an average of 0.5 per cent for retail and 2.1 per cent for offices.
The exceptions were warehouses which rose by an average of 0.4 per cent, greatly influenced by warehouse values in Limassol which rose by 4.5 per cent.
Across Cyprus, rental values for apartments rose marginally by 0.3 per cent, while rents on houses, retail units, warehouses and offices fell by a respective average of 2.1 per cent, 0.8 per cent, 0.2 per cent, and 2.1 per cent.
The distribution of rental changes shows an interesting dichotomy between Nicosia, which continues to be stable, and the coastal cities, RICS said.
Rents for all property types fell in Paphos “probably indicating the continuing woes of the city”, it added. Rents in Limassol, except for warehouses, also decreased – a sign that the crisis in now beginning to affect the Limassol market.
Demand for homes fell particularly among Britons and Russians as a result of an economic slowdown in their domestic economies, the survey showed.
Property sales to non-Cypriots slumped in 2008 and 2009 amid the global economic turmoil. Areas particularly affected were coastal areas popular with tourists.
RICS added that the early positive signs needed to be viewed within the wider context of a continuing curtailing of loans by banks and other financing institutions for property purchases, and to a change in people’s expectations of future changes in capital values and holding investment as an asset class.
