Cyprus property prices fall in Q4

A slack recovery in the property market kept property prices down in the fourth quarter of 2014, according to a survey published on Wednesday.

The survey by the Royal Institution of Chartered Surveyors (RICS) said that while property prices in much of the bailed out eastern Mediterranean island seemed to be bottoming off, they fell more in the capital Nicosia than in other areas.

The end result was a small fall in the fourth quarter and a drop of 8.1 percent at the end of 2014 on a year-on-year basis.

The drop in the third quarter stood at 9.6 percent.

Cyprus' property market slump started in 2009, marking the bursting of an estate bubble created by cheap credit and high foreign demand, mostly by English pensioners and other Europeans after the island's accession to the European Union in 2004.

A subsequent credit squeeze drove demand down as Cyprus was bailed out by the Eurogroup and the International Monetary Fund with a 10-billion-euro loan in 2013 for a three year period.

The bailout was conditional on a restructuring of the banks, which were left with bad loans amounting to 50 percent of the total, mostly secured with devalued estates.

The demise of the banking system is considered by analysts to be more serious than that of the administration, which seems to be doing well in slashing public expenses and securing increased revenue.

The property survey said prices in coastal towns fell much less than in Nicosia, which is the seat of the government. The city lies almost in the middle of the island and does not offer seaside attractions to foreign buyers. Endit