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Cyprus Property Prices Index

As a result of the global economic crisis, the beginning of 2010 met Cyprus with a slowdown in economy and a decrease of income for the Government due to the steep reduction in property transactions, mainly from overseas buyers. Some early signs of stability were marked at the end of the second quarter of 2010, as the local investors took advantage of the low prices in holiday homes. Several projects proceeded to approval and construction, providing an impetus to the property market. The positive signs ought to be viewed within the spectrum of the continuous restriction in loans by the banks, as tightening in bank credit conditions is still an obstacle to access mortgage finance and the expectations of the public regarding the future changes of the capital value.

Only recently, an index of the average property prices in Cyprus has been released to the public. The Property Prices Index (IPP) has been compiled by the Royal Institution of Chartered Surveyors (RICS) of Cyprus and the Cyprus Association of Quantity Surveyors and Construction Economists (SEEOKK). The methodology supporting the IPP was developed by the School of Real Estate and Planning at the University of Reading in the UK, under the supervision of Professor Patrick McAllister and Dr Franz Fuerst. The Index tracks property and rental prices applying to all districts and main property types. Some indicative rates are given in the tables below.

In general, residential property prices have fallen, but commercial prices seem to fluctuate between the major cities. Residential prices in Cyprus fell by proximately 2.5%, with the most dramatic fall in prices for houses in Paphos and for flats in Famagusta. According to the table below, the average price for a house in Cyprus rises to €2,000 per square metre. In Nicosia the average price to purchase a home reached €513,500. Limassol appears to have a lower average purchase price of a house, around €477,000.

When it comes to buying apartments, the average price is proximately €1, 865 per square metre, with apartments in Nicosia maintaining a lower average at €170,935, than in Limassol where average price hits €172,210. Despite that, as far as a purchase of an office space is concerned, Nicosia becomes more expensive all throughout the city, peaking on average, at €782,000 per unit, followed by Limassol at €600,000. The scenery changes regarding the purchase of a warehouse, with Limassol prices rising by 18% more than in the other cities, due to its busy port.


Average Unit Price (Euro)
Type
NicosiaLimassolLarnacaPaphosFamagusta
Apartment170,935172,210172,635147,220127,245
House513,500477,000402,750442,000402,250
Retail1,387,500922,500825,000707,550505,350
Warehouse2,508,0002,873,2002,092,2001,498,2001,238,600
Office782,200600,000476,800494,200324,800

Source: RICS Cyprus Property Price Index

As stated in the third edition of the IPP, residential rental rates per month indicate Famagusta to be the cheapest as the apartments hit an average price of €327 per month and houses €515 per month. In contrast Limassol tenants are the least privileged with monthly rates climbing at €559 and €1,148 for apartments and houses respectively. Nevertheless, in all cities, the majority of the houses referring to the locals are priced evenly. Fluctuations in Prices between the cities exist only in tourist areas and areas with sea views.

Regarding the commercial rental rates, Nicosia and Limassol mark the highest rental rates for high street retail, offices and warehouses. In Paphos the rental prices per month have dropped significantly, regardless the type of property, but Famagusta maintains the lowest rental prices in apartments, houses, retail and office space. Limassol offers higher rates on rent for house by 13%.  Further more, the highest prices in warehouse renting appear to be recorded in Limassol, by 78% given the presence of the port, when Nicosia offers the lowest rental rates in warehouses all over Cyprus. The highest rental rates regarding retail and office space remain in Nicosia soaring to €7,722 and €3,000 respectively.

 

Average Rent Per Month (Euro)
TypeNicosiaLimassolLarnacaPaphosFamagusta
Apartment566559493454
327
House7131,148738638515
Retail7,7225,4213,9532,8701,889
Warehouse6,60010,7369,6366,7548,250
Office3,0002,8881,6561,6941,27

Source: RICS Cyprus Property Price Index

Investment yields can be a useful tool, which shows the relationship between the rent and property prices. Commercial Property initial yields marked a minor increase, which lead to 6.0% for retail, 4.7% for offices, and 4.9% for warehouses. Residential property yields appear to be quite low at 3.6% for apartments and 2.0% for houses, showing that rental prices remain at multiples which are above the relevant prices of other European countries. This means that there is still room for further rebalancing.

LocationType

Cost (€)

To Buy 

Cost (€)

Rent (Monthly)

Yield  

Price/sq.m (€)

To Buy 

Price/sq.m (€)

Rent (Monthly)

Nicosia
Apartment    
170,9355664.0%
2,0116.66

House513,500
713
1.7%
2,054
2.85
Retail1,387,5007,7226.7%9,25051.48
Warehouse2,508,0006,6003.2%1,1403.00
Office600,0003,0004.6%3,91115.00
Limassol
Apartment
172,210
559
3.9%
2,026
6.58

House477,0001,1482.9%1,9084.59
Retail922,5005,4217.1%6,15036.14
Warehouse2,873,20010,7364.5%1,3064.88
Office600,0002,8885.8%3,00014.44
Larnaca
Apartment
172,635
493
3.4%
2,031
5.80
House402,7507382.2%1,6112.95
Retail825,0003,9535.7%5,50026.35
Warehouse2,092,2009,6365.5%9514.38
Office476,8001,6564.2%2,3848.28
Paphos
Apartment
147,220
454
3.7%
1,732
5.34
House442,0006381.7%1,7682.55
Retail707,5502,8704.9%4,71719.13
Warehouse1,498,2006,7545.4%6813.07
Office494,2001,6944.1%2,4718.47
FamagustaApartment
127,245327
3.1%
1,497
3.85
House402,2505151.5%1,6092.06
Retail505,3501,8894.5%3,36912.59
Warehouse1,238,6008,2508.0%5633.75

Office
324,800
1,272
4.7%
1,624
6.36

Source: RICS Cyprus Property Price Index

The outline of the properties that were used to calculate the index is the following:
Apartments: Two bedrooms, 85sqm, Medium quality.
Houses: Three bedrooms with garden, Semi-detached, 250sqm, Medium quality.
Retail: High-street retail, 100sqm ground floor area with 50sqm mezzanine.
Warehouse: Light industrial area, 2.000sqm, 200sqm office space.
Office: Grade A, City centre location, 200sqm.


It appears that property in the areas of Famagusta, Paphos and Larnaca, that are favourite amongst the foreign visitors and prospect buyers, have indicated a considerable decrease in both purchase and rental prices and are expected to decline even more. Therefore, Cyprus is fairly ranking amongst the top choices of property buyers.

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