Cyprus Property Analysis September 2009
An analysis of the current situation of the property market goes by the province, the Association of Scientists Valuers Cyprus, as well as forecasts for the remainder of the year. As noted in a related note, signed by the President of the Association Charalambos Petrides, the decision to start regular and comprehensive public information on trends in domestic real estate practice is derived after consideration, which was created from publications that have recently occurred in type of professionals and non.
The Association notes that: The area of the Cypriot property market is experiencing a period of decline and this is reflected in the liquidity of real estate, especially in the first half of 2009. In recent months shown some movement in foreign real estate, particularly in Nicosia and Limassol. During this period, according to statistics from the Department of Lands has been a reduction in the number of purchases and sales transactions by 54% compared to the corresponding period of 2008.
The main reasons for the above reduction (global financial crisis, a big increase in sales and prices in recent years, difficulty borrowing / interest rate etc.) have been analyzed by many scholars. The Association, in addition to an overall decrease of 54% for eight months, positively notes the gradual recovery of sales (reducing the rate of decline), after the January 2009 sales were at -72%, and in August the drop was limited to 31% and hopes that this trend will continue in the last quarter of the year. Means that changes in property values over the same period is similar to the above rates and very varied, depending on the province, region, even the asset. Summarized some evidence for each province:
ANALYSIS BY PROVINCE
Nicosia is generally the most stable province by the Pancyprian with small changes in values, particularly in central areas. Houses and apartments in the city with reductions ranging from 5-10%, while residential land in a slight corrective reductions to 5%. Commercial properties within the city, seems to have been affected. Property peripheral areas (eg Dali, Cherry, second) and rural villages with reductions up to 20%.
Limassol would be the second province where there was relative stability, again particularly in the central property area. Houses, apartments and residential land within the city and tourist areas are revised downwards up to 10%. Commercial properties within the city does not count the influence. Property peripheral areas (eg Ypsonas, Monastery) and rural villages with reductions up to 20%.
In central areas of the city of Larnaca observed stability with small corrective reductions to 5%. Houses and apartments in tourist areas (Dhekelia Pervolia etc.) estimated reductions of up to 15%. Special mention should be made in areas where there was a massive unprecedented growth in recent years (eg Oroklini Pyla) where reductions are calculated as 25%.
Paphos is the province with great influence. Within the city there seems to be relatively stable for residential land, and homes and apartments with reductions in 5-15%. The commercial properties are calculated and revised downwards by 10%. In tourist areas calculated reductions up to 20% for houses and residential land and up to 30% for apartments, while there was relative stability in the region of Polis [major projects under construction], and near the Coral Bay / sea caves. In outlying areas property declines 5.10% as regards the land and around 20% for both houses and apartments. In the countryside estimated reductions of up to 30%.
County with great influence, are Famagusta, but is helped by increased domestic demand (mainly seaside holiday). Housing and residential land with reductions up to 20% and apartments by up to 30%. In commercial real estate estimated reductions of up to 10%. Property outlying areas and villages of rural calculated reductions up to 30%.
Special mention should be made in areas which were based almost exclusively on the English market (eg Peyia, Oroklini, Sounion, Pissouri, etc.) where there are large reductions up to 40%. These reductions appear to result primarily from sales of used homes / apartments (resales) by English, which they and the existing rate of Euro to Sterling, enjoy the difference and repatriate funds by selling their properties, which had acquired a few years.
All above figures are approximate and are based on analysis, experience and knowledge of individual members of the Association of Valuers Cyprus Scientists, as scientists in industry. Certainly not entirely for each area and each property, since each piece or work is affected differently based on their own data. Two of the properties or projects in that area is probably reasonable to demand that have been affected differently due to different architecture, aesthetics, construction, quality, etc. If the demand is affected differently, depending affected and values, since the property or project flawed should reduce prices further to compete and to sell.
Above all there seems to be offering specific buildings mass production (mass-production), a non-competitive areas, which are classified as moderate-low level (qualitatively) with no particular architectural style or design and that is where the largest reductions occur. In high bands, in good areas there is this phenomenon. Beach property (beachfront properties) are not affected.
It is true that the biggest problem presented to exogenous demand, since in 2008 almost 45% of properties sold in Cyprus were strangers (foreigners), while the figures for 2009 show that only around 20% of total sales in 2009 ca are foreigners. This trend looks set to continue with what result.
THE REST OF 2009
It is not expected any significant difference in sales / marketability of the property during the remainder of 2009 but is estimated to be slowly returning confidence and interest in real estate for investment purposes. Provisions for property values is rather difficult to make, based on the current uncertainty in global financial market, which affects our economy. Some evidence of slightly improved situation reported by reputable organizations like the IMF and World Bank.
Locally, opportunities that will surely be there, no, but further significant reductions, particularly in inner cities and developed tourist areas. In regional areas the situation is more uncertain, particularly for projects in remote areas and projects of low quality and aesthetics.
Also, the reduced cost of constructing a house today (lower material costs and lower offers contractors), which is likely to give impetus and opportunity to those who plan to build their home.