Prop­erty prices start to sta­bilise in Q2

Financial Mirror (Cyprus) - - FRONT PAGE -

Prop­erty prices seem to be sta­bil­is­ing, ac­cord­ing to Cen­tral Bank of Cyprus data, de­spite a con­tin­ued de­crease in the value of the rel­e­vant in­dex for the 22nd suc­ces­sive quar­ter. How­ever, in all ar­eas, the an­nual declines in the sec­ond quar­ter were smaller than those of the pre­vi­ous quar­ter.

The prop­erty price in­dex fell at a de­cel­er­ated pace of 0.4% in the sec­ond quar­ter of 2015 com­pared to a 1% de­crease in the first quar­ter.

House and apart­ment prices fell by 0.4% and 0.6%, re­spec­tively.

On an an­nual ba­sis,

house

prices de­clined by 5% in the sec­ond quar­ter of the year, reg­is­ter­ing a de­cel­er­at­ing an­nual de­cline rate for the fifth con­sec­u­tive quar­ter.

“The econ­omy as a whole is show­ing signs of re­cov­ery as GDP in 2015 is reg­is­ter­ing a pos­i­tive growth, while de­mand for real es­tate con­tin­ues to show an­nual in­creases. These de­vel­op­ments are ex­pected to aid in sta­bil­is­ing prop­erty prices,” the cen­tral bank said in its quar­terly re­port.

The gen­eral house price in­dex recorded the big­gest quar­terly de­cline in Paphos (1.3%), so far the main driver of prop­erty sales, thanks mainly to hol­i­day home buy­ers and in­vestors tak­ing ad­van­tage of the res­i­dency scheme for pur­chases of at least EUR 300,000. Quar­terly de­creases were also ob­served in Nicosia (0.6%), Li­mas­sol (0.2%) and Lar­naca (1%).

Fa­m­a­gusta was the ex­cep­tion as a mar­ginal in­crease of 0.1% was reg­is­tered for the sec­ond suc­ces­sive quar­ter.

The largest an­nual de­crease in the gen­eral house prices in­dex was recorded in Lar­naca (6.3%) and the small­est in Fa­m­a­gusta (1.7%).

The de­crease in Nicosia was 5.7%, Li­mas­sol 4.3% and in Paphos 3.8%.

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De­spite the declines, prices are still 6.7% higher than in the first quar­ter of 2006. Prices have de­clined by 30.3% since 2008 when they reached their high­est level since the cen­tral bank started pub­lish­ing the data.

Observers sug­gest that the re­cently voted fore­clo­sures leg­is­la­tion is ex­pected to help the over­all fi­nan­cial sit­u­a­tion with the banks and the hous­ing mar­ket, as the new set of laws en­cour­age peo­ple who can ac­tu­ally af­ford to pay back their loans to start do­ing so, while banks are now more will­ing to re­struc­ture loans and pro­vide fa­cil­i­ties to high net worth in­di­vid­u­als.

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