"Cyprus Housing Market Stable" Say Agents

by Lorys Charalambous, Tax-News.com, Cyprus

20 January 2005

The Cyprus estate agents association says that although house prices have gone up by as much as 50% over the last four years, the market is now stable. On average the value of a property in Cyprus is now CYP85,533 (EUR147,271), less than in most other popular Mediterranean regions, which have seen rises of 20% a year or more, compared with 15% a year in Cyprus between 2000 and 2004. Three years ago in Paphos a detached property on a 600m plot with a pool would sell for CYP98,000; now that same house would sell for as much as CYP190,000 depending on the location. In the Larnaca area the same house would sell for considerably less.

Cyprus house prices went up on average by 7.2% last year, but started to slow down towards the end of the year. In November and December prices dropped by 1.5%. There was a rise in January through to May when Cyprus joined the EU and it continued until August when it began to level out. The Association says it has no reason to expect any major change either upwards or downwards in the immediate future. It is forecasting a 5% to 7% rise in 2005.

There are many reasons for the increase in demand and prices, says the Association, particularly that Cyprus has become very popular and also that it is now much easier for foreigners to borrow. For the last two years lenders have been willing to offer facilities for long-term loans for up to 30 years, which were not available before, and deposits have fallen to as low as 15% from 30% to 40%. The rise in property prices was also due to a rush to buy before May 1st because people supposed that once Cyprus joined the EU prices would increase.

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