Cypriot property prices recorded one of their steepest falls in years in the second quarter, a survey has shown, as an austerity-driven recession sapped demand in the country’s once-buoyant property market.
Market sentiment on the bailed-out Mediterranean island was dampened by a worsening outlook and lack of available cash to invest in the property market, according to the survey by the Cyprus branch of the Royal Institution of Chartered Surveyors (RICS).
“Definitely the market is going to deteriorate further and faster than before. There is no lending available and people’s money [in banks] is blocked,” said Pavlos Loizou of RICS Cyprus, a compiler of the survey.
Second-quarter annual declines – which ranged from a 12.6 percent price drop in the valuation of an apartment to a 23.3 percent fall for office space – were the sharpest recorded since RICS started collecting data in 2009, Loizou told Reuters.
Conceivably, they could be the sharpest over many years in a market not accustomed to sudden drops in valuations.
For at least a decade before 2009 Cypriot property prices were steadily growing on the back of foreign demand and liquidity-flush banks extending credit.
Over two growth cycles immediately before and after Cyprus joined the EU in 2004, property prices rose anywhere between 150 and 200 percent, Loizou said.