Cyprus-Forum.com

[Southerner]

It is rumoured that house prices will rise by 20% on entering the Euro, can anybody qualify this by giving the reasoning behind the rumour.
I know that things usualy get rounded up, but 20%.

[miltiades]

That is because relatively speaking Cyprus property is still undervalued based on European prices.
In London for instance , places like Battersea , you can not buy a 2 bedroom flat in a council block for under 200 thousand , move over to Chelsea and you are looking at almost half a million .Supply and demand ? Well teh demand in Cyprus will increase substantially over the next 5 or so years .Invest now in property before prices rocket.

[humanist]

Well good news as my inheritance will up by 20%, yeaeeeee there is a God after all,

[Baggieboy]

I'm always suspicious of Cyprus house prices rumours. We've been monitoring the market for some time now, and this is at least the third rumour in 4 years that prices will spiral (joining the EU was one).

Developers constantly spread these rumours to try to kick some life into the market.

Best rule of thumb is that the Cyprus market echoes the British one. A boom in the UK will be mirrored in Cyprus and vice versa.

At the end of the day your house is only worth what someone will pay for it, and a quick scan of a well known Cyprus estate agent shows that sellers are beginning to realise that people won't pay what they originally wanted.

Richie

[Southerner]

That is because relatively speaking Cyprus property is still undervalued based on European prices.
In London for instance , places like Battersea , you can not buy a 2 bedroom flat in a council block for under 200 thousand , move over to Chelsea and you are looking at almost half a million .Supply and demand ? Well teh demand in Cyprus will increase substantially over the next 5 or so years .Invest now in property before prices rocket.

For once I find myself dissagreeing with you, if they can't sell houses now how will putting up the price by 20% sell more houses. also the prices reflect the UK in general not just Battersea, I visit Cyprus property sites on a regular basis and find that for the first time since 1998 when I first stated following Cyprus property prices that many properties are actualy being reduced, this also reflects in the renting market as well, although the agents were asking one price the vendors were quite happy to accept considerably less.

[cyprusgrump]

Most of my Cypriot friends believe (genuinely) that prices will double when the Euro hits. Frankly, I can see no justification for any increase at all…

[beverley10]

Should I hold on to my 18month old apartment in Peyia as the current market seems saturated?Every body seems to think things are not moving and I only want back what I paid out with expenses.

[Hazza]

I'm looking at it with supply and demand. Looking around everywhere, there seems to be more supply than demand. I'm not holding my breath on a big jump in value.

[Johnson&Johnson]

how can anyone compare paphos with west london ? it beggars belief !

the rise in cyprus property prices is part of a global phenomenon driven by cheap credit and a vast increase in the world's money supply since 2001

the world central banks dropped their interest rates to practically zero following 9/11 and the bursting of the dot.com bubble, as they feared a global economic recession after those two catastrophic events

the factors are now being reversed as interest rates are on the rise. the american property sector has collapsed and is in the biggest slump since the great depression

the spanish property sector is collapsing right now

new figures from ireland show that prices are falling fast

england, to me, looks very sensitive and set for a slump mirroring the last property crash in 1991, where billions was wiped off the value of property and hundreds of thousands of brits went into negative equity.

it is highly likely that these slumps will affect the cyprus market as we are small economy and vulnerable to outside shocks. also, we have overbuilt and overdeveloped and there is chronic oversupply in the market

everywhere i go see 'for sale' or 'for rent' signs

whole blocks of apartments and whole developments standing empty

yet they keep building and building like crazy - and they expect me to believe that prices will rise ?

i think we are heading for some trouble...

[cosmic]

yet they keep building and building like crazy - and they expect me to believe that prices will rise ?

i think we are heading for some trouble...

They have to keep building because the loans they take out for the land and development costs are often mortgaged on the basis of the houses to be built on it. So they have to build in so far as the buildings become the security required by the banks - when the sales start to fail to cover interest costs, the banks move in and take ownership. If they cannot sell at a price to recover the loans, or just cannot sell - you get problems with the bank sector as is happening in Spain and the US at the moment.

No reason to believe Cyprus is at the stage