According to research collated by the Global Property Guide, the average price per square meter for an apartment in Cyprus’ biggest financial or administrative cities in August 2014 was €1,790.
This number was based on findings from properties in excellent condition which were refurbished or redecorated within the last five years. Newly-built and pre-sale property prices are not included.
The average price per square meter and indeed the Housing Index in Cyprus in general continued to drop in 2015 with the property industry showing signs of a depressed market, affected by the island’s recent economic struggle.
Although the first quarter of 2015 saw a 0.6% rise in house prices and a 0.4% drop in the average price of apartments according to the 22 edition of the Cyprus Property Price Index published by Royal Institution of Chartered Surveyors Cyprus (RICS), the Housing Index decreased to 93.27 Index Points in the third quarter of the year. The RICS found that house prices fell 0.56% in latest quarter.
Limassol witnessed the largest quarterly fall for apartment prices followed by Nicosia and Larnaca, while apartment prices in Paphos and Famagusta remained steady. On the opposite end of the spectrum Larnaca reported the largest rise in house prices, while in Nicosia house prices saw a continual decrease across the year. House prices in Paphos rose slightly in 2015 while in Limassol and Famagusta prices remained steady and relatively unchanging.
The major urban centres of Nicosia, Limassol and Larnaca are primarily driven by local demand while the holiday resort areas of Paphos and Famagusta traditionally see more demand from foreign investment. The economic crisis in Cyprus had a knock on effect to both markets.
There is light at the end of the tunnel though, as transactions are increasing showing signs that the industry is set to turn around for the better this year. Another positive change for 2015 was the 20% increase in marketability seen on an annual basis when compared to 2014 and 2013. The drop in prices seems to have restored market activity and although property prices are expected to continue on their downward trajectory this year, the pace of the decline is expected to slow down significantly thanks to the banking sector introducing stricter loan standards, as well as foreclosures on mortgaged properties and developments related to non-performing loans within the financial industry.