Further slowdown in property prices in Q2
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.