RICS Cyprus Property Price Index: Cypriot economy continues to show positive signs
According to the latest RICS Cyprus Property Price Index, the Cypriot economy’s performance was better than expected in the 4th quarter of 2015 and tourism mildly outperformed forecasts. Unemployment remained at a historical high level, stabilised at ca 14%, and discussions were ongoing regarding privatisations of state owned enterprises.
The Property Price Index has recorded falls in most cities and asset classes while the rate of decrease is less than it was in the previous quarters. In addition, certain districts and asset classes indicate signs of stability as Paphos, Larnaca and Famagusta are progressively bottoming out.
Across Cyprus, movements in property prices appear mix as residential prices for flats fell by 0.5% and 0.1% for houses. On a quarterly basis, rental values increased by 0.5% for apartments, 1.1% for houses and 0.2% for office.
The parallel reduction in capital values and rents is keeping investment yields relatively stable and at low levels (compared to yields overseas). This suggests that there is still room for some re-pricing of capital values to take place, especially for properties in secondary locations.