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Cyprus struggles to shake off the property slump
May 04, 2012
Cyprus' market struggles to 'pass go and collect 200'
The Cypriot property market struggles to shake off the slump as property and rental prices have continued to drop.
Decreasing rates are largely due to economic crisis, lack of funding, negative forecasts, and low performance, said Pavlos Loizou, a board member of Cyprus’ Royal Institution of Chartered Surveyors (RICS).
He said: “With the simultaneous reduction in rent prices, the result is for commercial properties yield to range between five and six per cent, which means they are not attractive to investors.”
Only if rents begin to stabilize and performance levels surpass seven to eight per cent yield will the Cyprus market cease to slump, presided Pavlos Loizou.
The downfall in the first quarter of this year reflects the trend set in the last quarter of 2011.
Renters’ and investors’ expectations of the properties sector have improved in many areas across the globe for the first quarter of 2012, according to RICS Global Commercial Property survey. But most markets are continuing to feedback negatively.
Aside from Germany and Poland, who have reported economic progress and an increase in rental demand, the remaining EU countries are said to be in a weak state, according to Cyprus Mail.
Loizou concluded over the problem facing Cyprus’ property market: “We are going through a long period of trying to balance the rentals with the prices, which will be followed by an extended period of inaction, until the economy stabilizes and starts to recover.”
Property sale and rental trends in Russia, Canada, Brazil and China shows that demand exceeds supply.
Hong Kong, Thailand, America, Malaysia and India have recorded improvements in the first quarter of this year.