Cyprus Property Price Index Launch

Last week, the Cyprus Mail reported on the launch of the first-ever, quarterly Cyprus Property Price Index (PPI). The new PPI has been compiled by the Royal Institute of Chartered Surveyors (RICS), Cyprus and the Cyprus Association of Quantity Surveyors and Construction Economists (SEEOK).

The property sector is a major contributor to the Cypriot economy but until now it has not had an independent property price index. The new PPI has been designed to provide reliable indications of trends in real estate prices of apartments, houses, retail premises, warehouses and offices across the island. According to the new PPI, prices are highest in Nicosia across all sectors, followed by Limassol, Larnaca, Paphos and Famagusta.

Average apartment prices in Cyprus (January 2010)

• Nicosia €171,155
• Limassol €177,978
• Larnaca €187,590
• Paphos €154,917
  

Average house prices in Cyprus (January 2010)

• Nicosia €523,438
• Limassol €496,250
• Larnaca €438,750
• Paphos €460,417
• Famagusta €412,500

Ex-Minister of Finance, Michalis Sarris, who was at the launch of the new PPI, highlighted the urgent need to bring clarity to the market, especially in the current economic downturn, saying that it was important to instill confidence investors and the public.

It is hoped that its transparency will be a vital tool for those involved in buying and selling real estate as well as those concerned with the stability of the Cypriot economy.

Sarris added that a reliable property price index was important to the government so that they could estimate revenues from property taxes and revenues, to the banks, to property professionals and of course the buying public. He said that the contribution of the property market “bubble” to the economic crisis in many countries means that governments and central banks are now paying more attention to price indexes, with a view to anticipating similar potential problems in good time.

The methodology on which the RICS Cyprus Property Price Index is based was designed Reading University’s Department of Real Estate & Planning.