Property Price Index - April 2009

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rich50
Posts: 3
Joined: 11 May 2009 08:13

Property Price Index - April 2009

Post by rich50 » 11 May 2009 09:28

I'm looking at http://www.mapsplatis.com/images/BuySel ... xq1-09.pdf with a quizzical expression. With the substantial global correction, the biggest market area (UK) one of the worst hit, and figures in Cyprus indicating a +30% (likely much more) drop in demand - there can be no way that those figures are correct. Go to the property vendor pages and they avoid taking about price drop, but openly quote demand drop. They are totally correlated. Here in Dubai the prices have already fallen by 30-40% and we're not at bottom. Home rentals down +30% and I just negotiated my office rent down from AED 450psqf to AED 325psqf which is just under 30%. Considering my landlord has a rock solid contract with me for a further 2 of 3 years, the fact that he dropped the rent shows the huge downward pressure (he cannot afford to have me walk, as he'll have empty space / likely get offers at 50% below the highs). Russians are not buying in Cyprus because CEE has been hit hard (70% stock market correction in Russia), and local Cypriot's are shy of the prices, knowing they are based on a bubble. So who is holding up the prices ? No one - the proper story cannot be getting out. Real estate websites are not the sensible place to go for real info (no pun intended) - does anyone know where is ?



Nigel Howarth
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Re: Property Price Index - April 2009

Post by Nigel Howarth » 11 May 2009 20:51

Hi Rich & welcome,

I'm afraid there are no government produced figures on property prices. As you are probably aware, the MAP S Platis figures are produced on behalf of a company that sells property - I'll say no more.

Two other things I find strange here:

1. If something isn't selling, they put up its price in Cyprus (I was talking with a Russian friend last Wednesday and it seems they tries the same 'trick' in Russia in the late 1990s - it didn't work there either).

2. It's been estimated that property developers have €4 billion mortgages and if the 'true' picture emerged, the banks (and possibly the economy) would be in deep do-do.

Here's a snippet from an article in the magazine published last December about prices:

ALTHOUGH it is generally believed that property prices in Cyprus have dropped by up to 20%, the Central Bank of Cyprus holds a different view. In its latest ‘Economic Bulletin‘ (in Greek) it reports that prices have slowed to a 10% increase from a 20% increase, which is in line with forecasts prepared on behalf of BuySell by MAP S.Platis.

This is in sharp contrast with the views expressed earlier this month by local property luminary Antonis Loizou who emphasised the fact that prices of tourist properties have already fallen by as much as 20%. The views of Mr Loizou are shared by hundreds of other businessmen surveyed by Stockwatch over the past few months who believe that the Cyprus property sector is in for a long period of recession.


Cheers,


Nigel Howarth
Independent information & advice for Cyprus property buyers
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rich50
Posts: 3
Joined: 11 May 2009 08:13

Re: Property Price Index - April 2009

Post by rich50 » 24 May 2009 07:55

Thanks Nigel. The comment 'in for a long period of recession' is partially fueled by lack of transparency. As with protectionism, there are many more losers than winners.
I am wondering where the market exists for distressed sales, or if that's cornered by Property agents with hidden lists of what's hitting 30-40% off high, and passing that to favored clients. Distressed debt and distressed sales are a fundamental of economic downturns, and while maybe not visible, it's there. Dubai is built on finance and tax free trade zones (many think of it as a tourist destination, but a little research and you'll find that it's a '3 day visit and you've seen it all' kind of a place), and private property is down 30-40%, while recessions is likely only a couple of negative points (good by world standards). With the Cypriot economic fundamentals based on tourism and property (two very challenging areas in harder times), it belies belief that the downturn is only having a 20% effect on prices. Another fundamental is that there are plenty of people with money on the sidelines, waiting for the bottom. 'Bullshit baffle brains' doesn't work with these people. It does the Private sales agents no good, to play the developers game, and in search of the commissions they were becoming used to, cling on to publishing the 20% number. Sellers need to bite the bullet, correct prices and get back to selling, or play the attrition game and hope to be amongst the 'last men standing' (which means layoffs and illiquidity).

We are more than 6 months into a major global correction - surely there is someone that has some real sales data ?

Cheers

Rich



Nigel Howarth
Site Admin
Posts: 2499
Joined: 24 Oct 2007 14:38
Location: Erimi, Limassol, Cyprus
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Re: Property Price Index - April 2009

Post by Nigel Howarth » 24 May 2009 09:16

rich50 wrote:surely there is someone that has some real sales data ?
The Land Registry will have information on all property sales for which contracts have been deposited with them. But this information is not available to the general public.

It's also interesting to note that a number of property developers in Paphos are now trying to rent their unsold properties.

Cheers,


Nigel Howarth
Independent information & advice for Cyprus property buyers
Contact Nigel Howarth
Read the latest Cyprus property news

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