Local property market shows signs of recovery
by Cyprus Mail
CYPRUS property sales to foreigners recorded an increase of 6.8 per cent in the first quarter this year, according to a new piece of research.
“No doubt this was stimulated by lowering property prices Cyprus-wide, as well as new positive developments in the macro economic landscape,” said Lambros Kaloyirou, Managing Director of Urban Splash Real Estate & Chartered Surveyors.
According to Kaloyirou, much of the renewed foreign interest was the result of investment funds looking to acquire significant deals on large-scale non-completed projects, particularly underdeveloped land with planning permits that are ready to start. Most of this interest is in city centres and prime location developments, as well as beachfront properties.
“Funds have been seeking to buy large volumes at one third of their market price,” he said. “Although this is not entirely feasible, new laws might now force banks to sell distressed assets, therefore pushing prices even lower.”
The other main factor driving economic recovery is Cyprus’ upgrading by rating agencies Standard and Poor, and Fitch, based on better-than-expected performance of the economy, and optimistic long-term prospects.
In terms of sales, the districts of Limassol, Larnaca and Famagusta recorded an annual increases of 19 per cent, 10.2 per cent and 20 per cent respectively. Meanwhile, Nicosia and Paphos recorded decreases of 2.2 per cent and 33.6 per cent, respectively, as reported by the Central Bank of Cyprus (CBC). Sales to Cypriot buyers however remain rather low and recorded a decrease in the same period, reflecting the local economic situation and access to liquidity.
“Although property prices continue to record a decline throughout Cyprus, it’s encouraging to see investments from foreigners on the incline, signalling a changing trend,” Kaloyirou said. “As demand continues to increase in the market, coupled with stagnation in the supply of new developments, prices will naturally follow to increase.”
Some property markets in Cyprus have already shown a slight increase in price index. Paphos, typically popular to foreign buying source markets such as the UK, has recorded an increase of 1.2 per cent in apartment prices in Q1 2014.
“Of course there is still a long way to go with economic recovery. The main message here is that the Cyprus property market is recovering, albeit slowly, and that buyers will now find excellent property deals in a market sure to improve and provide a good return.”
Meanwhile, June saw further increases in the number of property sales, although not at May’s levels.
Compared to June 2013, the Land and Registry department received 403 sales deeds, an increase of 51. The last two months’ results saw an overall increase in property trading of 24 per cent over the first half of 2014, totalling 2,213 property sales.