The latest stats reveal that residential prices in coastal towns continue to be the hardest hit while the capital Nicosia is also showing signs of vulnerability to the ongoing economic crisis.
Overall, residential property prices recorded a decrease of 1.8 per cent, doubling the price fall observed during the third quarter of 2011. The latest decline was slightly larger for house prices (1.9 per cent) compared with apartment prices (1.6 per cent).
The largest quarterly decline in house prices was registered in Famagusta (4.5 per cent), while the largest quarterly decline in apartment prices was in Larnaca (4.2 per cent).
In contrast, Nicosia registered the smallest decline in house prices (0.9 per cent) while a marginal increase in apartment prices was recorded in Famagusta (0.3 per cent).
Despite this, apartment prices in Famagusta have registered the second largest decline (after Paphos) since the first quarter of 2010. On the other hand, residential property prices in Nicosia, although relatively stable at the end of 2010, have also begun to retreat following, to a lesser extent, the downward trend recorded in the residential property prices of other districts.
On a year-on-year basis, residential property prices in Cyprus declined by 5.6 per cent when compared to the fourth quarter of 2010. Apartment prices registered the biggest annual decline since 2010 (7.2 per cent). The reduction was smaller for house prices, which in the fourth quarter of 2011 shrank by 4.7 per cent.
The annual decline in prices was recorded in all districts, with the largest registered in Famagusta (10.7 per cent), followed by Larnaca (8.8 per cent). The smallest reduction in residential property prices was registered in Nicosia (2.0 per cent), which recorded the smallest decline in both house and apartment prices (1.2 per cent and 3.1 per cent respectively).
However, these annual reductions were the largest registered in Nicosia since 2010, suggesting that residential property prices in the capital have also started to be affected by weak market conditions.
Larnaca recorded the largest annual decline in apartment prices (13.9 per cent), while the largest decrease in house prices was registered in Famagusta (8.3 per cent).
Meanwhile, figures across the construction industry continued to paint a bleak picture. According to data published by the Statistical Service, construction activity continued to record negative growth in the fourth quarter of 2011, with no signs of recovery.
In the last quarter of 2011, domestic sales of cement recorded a substantial annual decrease of 24.5 per cent, while the price index of construction materials rose by 4.1 per cent.
Data collected by the Department of Lands and Survey revealed that in the same quarter the number of sales contracts decreased by 21 per cent compared with a decrease of 5.5 per cent in the corresponding quarter of 2010.
The largest annual decreases were recorded in Nicosia (37.4 per cent) and Larnaca (27.8 per cent). Significant declines were also registered in public revenues from immovable property tax and capital gains tax (57.1 per cent and 39.4 per cent respectively).
The number of unemployed in the construction sector grew by 37.4 per cent in the fourth quarter of last year compared with that of 2010, recording the highest number of unemployed since 2002.
Building permits for residential properties also continued to register large reductions (43.9 per cent), signifying an even greater decline in future construction activity.
By Stefanos Evripidou
Published on April 10, 2012