By Stelios Orphanides
Property prices in the third quarter of 2015 continued to fall in Cyprus, but at a slower pace, accompanied by a recovery in rental prices, according to the Royal Institute of Chartered Surveyors.
The prices of apartments and houses dropped a quarterly 0.4 per cent and 0.5 per cent respectively, RICS said.
“The property price index has recorded drops in most cities and asset classes, while the rate of decrease is less than previous quarters,” RICS said in an emailed statement on Monday. “In addition certain districts indicate signs of stability, as Paphos, Larnaca and Famagusta are progressively bottoming out”.
Prices for flats in Famagusta and houses in Limassol recorded the biggest falls — between July and September they were1.2 per cent and 3.2 per cent lower compared to the second quarter, RICS said. Houses in Nicosia saw their price drop by 0.3 per cent in the third quarter compared to the period between April and June.
Retail property prices fell an average 0.6 per cent in the third quarter compared to the second quarter, while prices for warehouses rose 1.1 per cent respectively, RICS said.
Between July and September, flats and houses were on average 1.9 per cent and 1.3 per cent more affordable compared to a year before, RICS said. Prices for retail properties, offices, and warehouses fell a quarterly 4 per cent, 2.7 per cent and 1.8 per cent, respectively.
Rental prices for apartments and houses rose 0.3 per cent and 1.5 per cent respectively in the third quarter compared to the previous quarter. Rents for offices rose 2.6 per cent, RICS said. Rental prices for retail properties and warehouses fell 1.1 per cent and 0.1 per cent. In the second quarter of 2015, rental prices fell compared to January to March.
Compared to the third quarter of 2014, flat and house rents fell 1.5 per cent and 0.5 per cent respectively in July to September, while those for retail properties, warehouses and offices fell 4 per cent, 2.5 per cent and 0.2 per cent, RICS said.
“At the end of the third quarter 2015, average gross yields stood at 3.9 per cent for apartments, 2 per cent for houses, 5.2 per cent for retail, 4.3 per cent for warehouses, and 4.5 per cent for offices,” RICS added. “The parallel reduction in capital values and rents is keeping investment yields relatively stable and at low levels, compared to yields overseas. This suggests that there is still room for some re-pricing of capital values to take place, especially for properties in secondary locations”.