RICS does not expect a recovery in the property market until the second of 2011. The latest RICS Cyprus Property Price Index published this month shows further weakness.
Residential prices for both houses and apartments fell on average by 1% and 2% respectively during the third quarter of 2010, with the greatest falls in Larnaca, nearing 5%.
Prices in the commercial property sector fell even further across all cities with the exception of Nicosia by an average of 2.6% for retail and 2.3% for offices. In Larnaca, retail values fell by nearly 12% on the quarter, while office values fell by around 6%. Only warehouse values remained stable across all regions during this quarter.
In general, rents are continuing to fall, with the largest drop on houses (1.8%) and retail units (1.7%).
Josh Miller, Senior Economists at RICS, comments: "2011 is likely to be a year of two halves for the Cypriot property market. During the first half, the labor market will probably continue to deteriorate given still depressed levels of sentiment and a weak labor market; as a result, property values are unlikely to find much support. However, the economy returned to growth at the beginning of last year and, given the usual time lags, this should eventually feed through to the labor market and stabilize property values towards the latter part of the year."