New property price index for Cyprus

Published 11th Feb 2010

The beleaguered Cyprus property market is set to benefit from a brand new property price index introduced by The Royal Institution of Chartered Surveyors (RICS) in a bid to make the country's real estate market more transparent...

The RICS Cyprus Property Price Index has been designed to provide reliable indications of trends and broad changes in real estate pricing of apartments, houses, offices, high street retail premises, warehouses and offices and it tracks property prices and rents across 46 locations.

The Index monitors the urban centres of Nicosia, Limassol, Larnaca, Paphos and Paralimni-Famagusta. It only tracks prices in Republic of Cyprus' Government controlled area and not in the occupied North.

Overall, the Index tracks prices and rents across 46 locations and will be published quarterly. The first one will provide a base index on which all future changes in price and rental levels will be benchmarked.

The methodology on which the RICS Cyprus Property Price Index is based was designed by Professor Dr Pat McAllister MRICS and Dr Franz Fuerst from the Reading University Department of Real Estate & Planning at Henley.

Professor McAllister spoke of the important role of the Index in identifying what is happening in the Island's property market.

"These values will provide you of the best estimate of what you will be able to sell your property for."

The first index, which has just been published, reveals the extent to which the country has been affected by the economic crisis. Cyprus has suffered a severe reduction in property transactions - a whopping 50 per cent lower in 2009 than in 2008.

In particular a massive decrease in the number of overseas buyers has had a severe impact, the report points out. Foreign buyers have decreased by 80 per cent compared with the period from 2005 to 2008. Lending has also tightened up.

The distribution of rents paints an interesting picture. Compared to Nicosia, rents for office space and for houses are higher in Limassol, by 68 per cent and 13 per cent respectively, probably due the presence of overseas companies.

House and apartment prices are spread evenly across the island, with an average price of €1,865 per square metres for apartments and €2,001 for houses. The low standard deviation across all cities of only nine per cent and 10 per cent respectively shows that, excluding tourist areas and areas of special value, the vast majority of homes for locals are evenly priced.

Source: ' TMC '

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