This is the thirty-first publication of RICS’ Cyprus Property Price Index, a quarterly price and rental index which is based on methodology produced by the University of Reading, UK. The Index tracks property and rental prices across all districts and main property types.
Introduction & Commentary
During the second quarter of 2017 the Cyprus economy showed further signs of stability, with a seasonally adjusted quarterly GDP growth of 0.9% and an annual seasonally adjusted GDP growth of 3.5%. Unemployment remained at relatively high levels, on a continued downwards trend to ca 10.8% (from the high levels of 17%). Given prevailing economic conditions and the marginally improved confidence in the Cyprus’ banking system, there are relatively higher transactions during the quarter and improved market sentiment. Financial institutions, despite of their NPLs, have been more willing to provide access to finance and there is an increasing interest from locals.
Market Capital Values
The Property Price Index has recorded increases on an annual basis in all cities and asset classes, with significant increases being recorded in Limassol, Nicosia and Larnaca, whilst Paphos and Paralimni have shown smaller annual increases.
Market Rental Values
Across Cyprus, on a quarterly basis rental values increased by 3.0% for apartments, 1.0% for houses, 2.0% for retail, 3.7% for offices and 0.7% for warehouses.
Compared to Q2 2016, rents increased by 8.3% for flats, 10.2% for houses, 6.8% for retail, 14.4% for offices and for warehouses 4.2%. All asset classes have shown a consecutive quarterly growth.
Appraisal based initial yields
At the Q2 of 2017 average gross yields stood at 4.1% for apartments, 2.1% for houses, 5.4% for retail, 4.3% for warehouses, and 4.9% for offices. The parallel reduction and/ or stabilisation 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.
Index parameters and methodology
Coverage and Variables Monitored
Nature of Notional Buildings
The RICS Cyprus Property Price Index monitors hypothetical or notional buildings, each having specific characteristics. Details of these hypothetical properties are provided in the University of Reading’s report. The provided price per sqm is based on the Gross External Area of the property (as defined in the RICS’ Code of
Measurement Practice 8th Edition), which includes the living area and covered verandas but excludes common areas.
The index is produced on a quarterly basis.
The estimation of price levels is carried out by accredited RICS property professionals who are active in the relevant markets.
Contributing professional bodies
Profile of RICS
RICS is a global professional body. We promote and enforce the highest professional qualification and standards in the development and management of land, real estate, construction and infrastructure. Our name promises the consistent delivery of standards – bringing confidence to the markets we serve. The work of our professionals creates a safer world: we are proud of our profession’s reputation and we guard it fiercely. RICS in Europe is based in Brussels and represents 17 national associations, with over 8,150 members in Continental Europe. Visit www.rics.org for more information.
Profile of ΣEEOKK
The Cyprus Association of Quantity Surveyors and Construction Economists (ΣΕΕΟΚΚ) is the association that represents Chartered Quantity Surveyors and Quantity
Surveyors whose main area of work is in Cyprus and they permanently live in Cyprus. Visit www.seeokk.org for more information.
Profile of Cyprus Association of Valuers and Property Consultants
The Association was founded in 1972. At present there are about 100 members registered with the Association and concurrently with the Cyprus Scientific and Technical Chamber (CSTC), which is the official body that regulates the Valuation Profession in Cyprus. Our members are also members of RICS and are operating in accordance with the International Valuation Standards and the RICS Appraisal and Valuation Manual (Red Book).