In the second quarter, house and apartment prices fell 0.4% and 0.6% compared to January to March, the central bank said in a statement on its website today. In the first quarter, house and apartment prices fell a quarterly 0.8% and 1.5% respectively. House prices fell an annual 4.6% in the second quarter and apartment prices fell 6.2%.

“The wider economy shows signs of recovery as gross domestic product in 2015 grows as demand for immovable property continues to rise on an annual basis,” the central bank said. “These developments are expected to support the stabilisation of home prices”.

Home prices fell a quarterly 1% and an annual 6.5% in January to March, the central bank said. In the second half of 2014, homebuyers paid 2% less compared to the quarter before and 9.1 % compared to a year before.

“Home prices are expected to stabilise around 2006 levels, the year in which excessive demand for mortgages started which led the overheating of the sector,” the central bank said.

The enactment of the foreclosure legislation “is expected to be supportive to the financial state of banks and to contribute towards a further normalisation in the Cypriot economy in general,” the central bank added. “The implementation of the legislation in question is not expected to cause considerable consequences to property prices, as its main target is to help pressure those borrowers who have the ability to pay their debts and opt for strategic default on the one hand, and on the other to help solve older cases still pending at the courts”.

In Nicosia, home prices fell in the second quarter 1.3% in Paphos compared to the first quarter, while in Nicosia, Limassol and Larnaca, they fell 0.6%, 0.2% and 0.1% respectively, the Central Bank of Cyprus said. In Famagusta, home prices rose for the second consecutive quarter 0.1%.

Compared to a year before, home prices fell the most in the Larnaca district and the least in Famagusta, where prices dropped 6.3% and 1.7% respectively, the central bank said. In Nicosia, Limassol and Paphos, home prices decreased 5.7%, 4.3% and 3.8% respectively.

Source: Cyprus Mail