NICOSIA-- Cyprus residential prices in the second quarter of 2012 marked the steepest decline since 2010 Central Bank of Cyprus (CBC) figures released Tuesday show. The CBC estimates that the correction path on property prices that began in the third quarter of 2008, will continue in the short-term. The Residential Property Prices Index (houses and apartments) complied by the CBC for Q2 2012 to 90.3 units recording a decline of 2% compared to Q1 2012. Year on year Property Price Index marked a reduction of 5.9% which is biggest annual reduction in the last two years. Houses prices marked an annual decline of 6.5% and apartment prices a decline of 5.1%. On a quarterly basis Cyprus-wide house prices declined by 2.2% and apartment prices registered a reduction of 2.2%.
The highest quarterly reduction was recorded in the eastern coastal district of Famagusta district with house prices declining by 4.4% and 3.7% in apartments. The western district of Pafos recorded the lowest decline of 0.4% for apartments and 0.5% in houses. The stabilizing figures in the western district are attributed to the increase in property purchases both from Cypriot residents as well as non-residents. In the capital, Nicosia, quarterly apartment prices decelerated by 1.1% and house prices by 1.8%.
On an annual basis Famagusta recorded the highest drop in both apartment prices (-8,2%) as well as house prices that dropped by 12.7%. Limassol registered the lowest annual decline with 3.6% apartment’s prices while Nicosia followed with 4.6%.
The annual reduction in property prices (both apartments and houses) in the districts of Famagusta and Larnaca (11 and 8% respectively) were the highest ever recorded.
However, figures recorded by Department of Lands and Surveys show that the number of contracts increased by 1.6% year on year, recording an annual increase for a second consecutive quarter. The number of sale contracts concerning Cypriot residents reached 1.409 compared with 1.321 while contracts by non residents declined by 11.4% (449 transactions compared with 507).
"In the short-term the housing market is expected to continue its correction path under way since the 2008 third quarter, according to the Consumer and Business Survey published by the European Commission," the CBC concludes.