Fur­ther slow­down in prop­erty prices in Q2

Financial Mirror (Cyprus) - - FRONT PAGE -

Res­i­den­tial prop­erty prices con­tin­ued on a sta­bil­is­ing path in the sec­ond quar­ter of 2016 record­ing a small slow­down in their downward trend, ac­cord­ing to data re­leased by the Cen­tral Bank of Cyprus.

The Res­i­den­tial Prices In­dex (RPI), which con­cerns houses and apart­ments, saw a smaller quar­terly drop (0.5%) com­pared to the pre­vi­ous quar­ter (0.8%). Prices for apart­ments and houses recorded a quar­terly drop of 0.2% and 0.6%, re­spec­tively.

“The ex­tremely slight vari­a­tions recorded by the Res­i­den­tial Prices In­dex in the last pe­riod re­flect the mar­ket ten­dency to­wards sta­bil­i­sa­tion of res­i­den­tial prices and / or re­ver­sal of neg­a­tive ten­den­cies,” the bul­letin said.

On an an­nual ba­sis, the RPI fell by 1.7% dur­ing the sec­ond quar­ter of this year, com­pared to an an­nual re­duc­tion of 5.1% in the same quar­ter of 2015.

House prices fell by 2.1% on an an­nual ba­sis and apart­ment prices by 0.4% com­pared to re­spec­tive an­nual drops of 4.6% and 6.3% at the same quar­ter last year.

Apart­ment prices in­creased on an an­nual ba­sis in Li­mas­sol (0.2%) and Paphos (3.3%) as well as house prices in Paphos (0.4%).

At the same time, con­struc­tion ac­tiv­ity con­tin­ues to show growth while lower lend­ing rates and a sta­bil­i­sa­tion of credit cri­te­ria, as well as other in­cen­tives the govern­ment of­fers to prop­erty buy­ers have had a pos­i­tive im­pact in an in­crease in de­mand.

Re­fer­ring to the prospects of the prop­erty mar­ket in gen­eral, the Cen­tral Bank’s bul­letin re­called the Euro­pean Com­mis­sion’s eco­nomic sen­ti­ment sur­veys which “present a bet­ter pic­ture com­pared to a year ago.”

In par­tic­u­lar, the in­dex for em­ploy­ment ex­pec­ta­tion in the con­struc­tion sec­tor a the sec­ond quar­ter of 2016 was on av­er­age at -0.3 com­pared to -4.1 at the same quar­ter of 2015. The in­dex for prop­erty prices ex­pec­ta­tions recorded a less neg­a­tive fig­ure, on av­er­age -5.7 at the sec­ond quar­ter of this year com­pared to -19.6 at the same quar­ter of 2015.

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