Purchase prices and rents for residential and commercial properties are continuing to drop, according to the latest index from the Royal Institute of Chartered Surveyors (RICS).
The property market has been adjusting downwards for years, following unsustainable activity between 2004 and 2008. The market’s overheating revealed serious problems in legislation as well as with banks’ risk management that will take years to fix.
During the third quarter of 2013, prices in Nicosia and Limassol continued falling at a higher rate than other cities that were impacted earlier, RICS was quoted as saying by the Cyprus News Agency that got an advance copy of the report.
Across Cyprus prices for houses fell by 1.0 per cent and 2.7 per cent, compared with the second quarter of the year. Compared with the same period last year, apartment prices across Cyprus fell by an average of 14.6 per cent, with houses’ prices dropping by 11.1 per cent, shops by 20.2 per cent, warehouse by 16.2 per cent and offices by 13.2 per cent.
Compared with the previous quarter of the year, rent prices fell by an average of 5.2 per cent for apartments, 5.4 per cent for houses, and 12.0 per cent for shops. Warehouses’ rentals fell by 7.1 per cent and offices by 8.8 per cent. In Famagusta, where prices have been falling for years, purchase prices and rents showed a marginal increase.
Properties’ initial gross yields – the percentage of annual rents to a property’s market value – continue to remain at low levels compared with abroad, RICS said.