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Property prices in Cyprus continue falling, latest RICS index shows
Residential property prices in Cyprus continued to fall in the final quarter of 2014 but some local agents are reporting an increase in sales. Average price of houses fell by 1.1% and apartments by 0.7%, according to the latest index from the Royal Institute of Chartered Surveyors (RICS). The country’s property market was particularly badly hit during the global economic downturn of 2007 and since the RICS index was first published in 2010 house prices have fallen by an average of 30% and apartment prices by 40%. The largest quarterly falls were in Famagusta where house prices fell by 3.6% and in Nicosia where apartment prices were down 1.1. Compared to the fourth quarter of 2013, the average price of an apartment has fallen 5% and the average price of a three bed home is down 5.4%. RICS said that sales have rebounded but prices are expected to continue falling in 2015. The situation is not helped by a strict lending regime following the island’s banking crisis and high interest rates. ‘The market is affected by increased property taxes and the issue of foreclosures on mortgaged properties, preventing the market from stabilising,’ said a spokesman. Rental values are also still on a downward trend, with house rents down 0.2% and apartment rents down 1.3%. ‘During the fourth quarter of 2014 the Cyprus economy showed some signs of stability, with the economy’s performance being better than expected and tourism mildly outperforming forecasts. Unemployment remained at a historical high level, stabilised at around 17%, and discussions were ongoing regarding privatisations of state owned enterprises and the foreclosure bill,’ the RICS report says. ‘Given prevailing economic conditions and the turbulence in Cyprus’ banking system, there were few transactions during the quarter although volume was higher on a year on year basis. Local buyers in particular were the most discerning as the increase in unemployment and the prospects of the local economy maintained the lack of interest,’ it explains. ‘Furthermore, those interested were unable to access bank finance. The Property Price Index has recorded falls in almost all cities and asset classes, with significant falls being recorded in Nicosia. Nicosia is clearly feeling the impact on the government and banking sector, the two sectors who dominate the local employment market, whilst other cities are progressively bottoming out,’ it adds. According to local property firm Fitzgerald Marketing, sales increased by 20% in 2014 compared with the previous year, but it is local people who are buying again as the international market has not really picked up since the global economic downturn. The firm believes that as property prices have reduced significantly, up to 40% in popular areas such as Paphos, buyers could be keen to grab themselves a bargain in 2015. It is thought that with the discovery of oil and gas fields in Cypriot waters, as oil companies set up their offices thousands of workers will arrive in two to three years, all in need of homes. There have been tales… Continue reading
Tenant survey reveals the secrets they keep from landlords
The most common secret that tenants in the UK don’t want revealed is making excuses to try and avoid paying the rent, followed by keeping pets without permission, a new survey has found. Some 63% said they have tried to avoid paying rent and 45% have pets without letting the landlord know while 45% have damaged walls by knocking nails into them, according to the report from online letting agent Property Let By Us. The research also reveals that nearly a quarter of tenants confessed that they have rarely, or never cleaned their oven, 18% haven’t mowed the lawn regularly, 11% have dumped rubbish at the front and in the garden and 6% have sublet a room. When it comes to expensive damage to property, 4% admit to burning holes in floor coverings and concealing them with mats. ‘Our research shows that large numbers of tenants have made excuses to avoid paying the rent, which is worrying. The latest industry figures show that tent arrears are on the rise again, up by 7.2% in 2014, an increase of 4,600 tenancies compared to the same quarter in 2013,’ said Jane Morris, the firm’s managing director. She pointed out that one way that landlords can ensure they protect themselves from arrears and potentially bad tenants, is by conducting thorough tenant reference checks. ‘These background checks on tenants are so important. Picking the right tenant can save a long, costly eviction process further down the line,’ said Morris. ‘Landlords need to be thorough in conducting background checks and reference gathering, including bank statements for the past three months, previous landlord references to check the tenant paid rent on time, credit checks, incorporating fraud indicators and employer references. It’s important to also check identity and proof of current address, ideally tax or insurance documents, and talk at length to a prospective tenant,’ she explained. She added that landlords should also make regular checks on their property during the tenancy, so they can spot any breaches. In addition, landlords should also check each rental property thoroughly for signs of common damage, which can often be missed at the end of the tenancy, potentially costing landlords hundreds of pounds. Continue reading
Central London property prices still falling, latest index shows
Further evidence is emerging that the central London housing market bubble has burst and price falls are spreading throughout the rest of Greater London, the latest index suggests. Prime central London prices are still falling as the supply of properties rises and confidence in property as an investment ebbs away,’ according to the data from Home.co.uk. Central London locations dominate the latest list of biggest house price falls across the UK, with Walworth in the London Borough of Southwark seeing a 15% fall in average house prices between January 2014 and January 2015. House prices in Belgravia fell by 10.3% over the same period and Cromwell Road in Kensington saw a slump of 8.3%. Of the 20 UK areas with the biggest annual fall in sales prices, 11 are in London. Landlords' return on investment on central London properties is also falling. Of the 15 UK locations recording negative real % yield, which occurs when the value of the property depreciates by more than the annual rent, 12 are in central London. The index shows that in January 2015, landlords with a property in Walworth recorded a negative real % yield of 11.3%, while in Belgravia the negative real % yield stood at 7.1%. Central London flat prices are among the hardest hit. On average, the price of a flat fell by 9% in central London between January 2014 and January 2015. Over the same time, the number of flats for sale in central London has increased by 64%. Since November 2013, the price of a typical flat in Belgravia has fallen 20%, from £1,995,000 to £1,600,000. A similar price correction has already spread into Islington, where the typical asking price of a flat has dropped 11% since March 2014. This represents a loss of £85,000 for flat buyers in Islington over the last 10 months. There is further evidence that price falls are rippling out to more remote areas of Greater London and look set to spread further into the South East. The spectre of negative equity is looming large for recent buyers. Further out in Greater London, Holloway flat prices peaked in May 2014 but have since dropped by 13%, while the typical time on market for flats in the area has more than doubled. Meanwhile, Muswell Hill in North London has seen flat prices fall 4% since October last year. ‘Optimism in the UK housing market is still riding high in the?rest of the country, but it comes as a?shock to many to?learn that prices are?crumbling in the?most expensive streets in London,’ said Doug Shephard, Home.co.uk director. ‘These price movements may soon have a knock-on effect for the rest of Greater London and, later, the Home Counties,’ he added, pointing out that prices in central London went up too far, too fast during 2012 and 2013. ‘In a synthetic property boom and bust such as London has experienced, on account of ultra-low interest rates and other stimulus measures, it is hard to… Continue reading
