Apartment prices dropped in January to March by an average 0.4% compared to the last quarter of 2014, RICS said. Apartment prices fell 1% in Limassol and rose 3% in Larnaca.
Shop prices dropped 1.7% on average in the first quarter compared to October to December, while office prices fell 0.1%, RICS said. Warehouse prices rose on average 1.3%.
Prices for apartments, houses, shops, offices and warehouses fell in the first quarter of the year on average by 3.2%, 3%, 8.1%, 4.8% and 3.2%, respectively, compared to the respective period in 2014, RICS said. Rental values across the island fell in January to March by a quarterly rate of 0.3% for apartments, 1.9% for offices, 0.4% for shops and 0.1% for warehouses, while house rents rose a marginal 0.1%, RICS said.
“Compared to the first quarter of 2014, rents dropped by 4.0% for flats, 1.2% for houses, 8.1% for retail, 5.9% for warehouses and 3.5% for offices,” the report said.
“The majority of asset classes and geographies continue to be affected, with areas that had dropped the most early on in the property cycle now nearing or at the trough. Paphos, Famagusta and Larnaca are showing some signs of price stability,” RICS said.
Average gross yields stood in the first quarter of the year at 3.8% for flats, 2% for houses, 5.3% for retail, 4.3% for warehouses, and 4.4% for offices, RICS said, adding that “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,” RICS said.
Charalambos Petrides, a member of RICS, said that while the downward trend of property prices on an annual basis continues,in the first quarter of 2015, the quarterly decline came to a halt in the Paphos and Famagusta district, which mitigated the annual price drop.
“The positive thing seen in the first quarter of 2015 compared to 2014 and 2013, is the 20% increase in marketability on an annual basis,” Petrides said. “It seems that property transactions have recovered and the drop in prices is restoring market activity”.
The drop in property prices is expected to continue on an annual basis in 2015 as well, but at a slower pace than in 2014, he said, adding that this is related to pending developments in the financial sector related to non-performing loans, foreclosures and stricter loan standards in the banking system.
Source: Cyprus Mail
