Cyprus Housing Market – Latest News (16.3.09)

The Royal Institution of Chartered Surveyors (RICS) in the UK published their 2009 European Housing Survey earlier this month and there was some cautious optimism about the Cyprus housing market.
The report noted that the market in Cyprus is ‘temporarily static, rather than in decline,” and that house building on the island is still at high levels, despite the worsening economic situation throughout Europe.

So according to the RICS analysis of the Cyprus market, a glimmer of optimism is allowed, despite an understandable air of pessimism about falling prices in property markets in most European housing markets.

The report noted that the sustained housing boom that Cyprus experienced both before and after EU accession in 2004, had finally begun to level off in 2008 when asking prices stayed static.

The Property Valuers Association recently reported that property registrations were down 24% year-on-year in October 2008.

Yet the RICS report also notes that house building levels in Cyprus have been high - in recent years the country has had the highest house building rate in the EU, with housing stock expanding by 30% in the past decade.

RICS acknowledges that a slowing in the market is evident but suggests that it is hard to predict how much it will be affected by the global economic slowdown in 2009.

As we have reported in these news pages before, the Central Bank of Cyprus is confident that the economy and the financial system will weather the storm, although RICS says that much will depend on overseas interest in property on the island.

To that end, the government and the Cyprus Tourism Organisation (CTO) are working hard to appeal to traditional and alternative markets. 2008 was also the year that visitors from the traditional markets of Britain, Germany and Greece began to drop off because of the global recession.

The CTO is confident about the Russian market and estimates that the numbers of tourists from Russia will increase in the coming months.

The Cyprus Ministry of Commerce, Industry and Tourism as well as the CTO are carrying out intensive contacts in the island’s main feeder tourist markets such as Britain, Russia, Germany and Sweden.