Creation Date: 28-01-2015 Selected Municipalities: Dromolaxia/Meneou, Kiti, Softades Tersefanou
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Table of Contents
1. 1.1 1.2 1.3
Cyprus Overview Cyprus ......................................................................................................................... 3 Cyprus Economy ......................................................................................................... 3 Cyprus Property Market ............................................................................................. 3
2. 2.1 2.2
Overview of Larnaca District Larnaca District ........................................................................................................... 4 Economy of Larnaca District ....................................................................................... 4
3. 3.1 3.2 3.3 3.3.1 3.3.2 3.4 3.4.1 3.4.1 3.5
Main Report Search Parameters ...................................................................................................... 5 Map ............................................................................................................................. 5 Statistics ...................................................................................................................... 6 Definition Transaction Volume ................................................................................... 6 Definitions Relating to Median Price .......................................................................... 7 Graphs......................................................................................................................... 8 Transaction Evolution ................................................................................................. 8 Price Distribution ........................................................................................................ 12 Thermal Map .............................................................................................................. 16
4. CEI Profile.......................................................................................................................... 18 5. Contact Details ................................................................................................................. 18
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1. Cyprus Overview 1.1 Cyprus The Republic of Cyprus (‘Cyprus’) is an island country in south-eastern Europe. With an area of 9,234m² and a population of circa 1,050,000 persons (in both its southern and northern, occupied part), it is the third largest island in the Mediterranean Sea. Cyprus has been a member of the European Union since 2004 and a member of the Euro zone since 2008. It is divided into five administrative districts: Nicosia, Limassol, Larnaca, Paphos and Famagusta.
1.2 Cyprus Economy The economy of Cyprus is services-dominated with the tertiary sector contributing circa 80% to GDP and employing more than 70% of the country’s active population. The economy’s most important sectors, tourism, financial and insurance activities and real estate, account for over 28% of GDP. The share of agriculture is circa 2%, and manufacturing and construction circa 5.5% each. Cyprus is also a major international shipping centre with its registry ranking 1oth among international merchant fleets and with over 60 ship management companies operating in its territory. The economy relies heavily on imports; its energy sector in particular is highly dependent on imported sources, a situation expected to somewhat change following the recent discovery of natural gas reserves in the island’s waters.
1.3 Cyprus Property Market The Cyprus property market is dominated by the residential sector, with the island’s geography and historical reasons partly dictating the dynamics of the various submarkets. Nicosia, the capital, is dominated by government services and houses the headquarters of most banks and financial institutions. Limassol, the main commercial port, has a high proportion of overseas residents and of companies active in shipping, financial services etc. having a more outward looking focus. Larnaca and Paphos house the island’s international airports, with both cities having a sizeable proportion of overseas residents and holiday homes. The unoccupied part of Famagusta district has a developed second house market as well. Prices& Rents The Q3 2014 RICS Cyprus Property Price & Rental Index recorded a significant fall in almost all cities and asset classes across Cyprus. Compared to Q3 2013, prices dropped by 4.4% for houses, 6.3% for flats, 9.6% for retail, 6.3% for office and 4.2% for warehouses. Property prices dropped by ca. 5.3% YoY for residential and by 6.7% for commercial properties. Year-on-year falls (Q3 2013 – Q3 2014) in rents reached 4.7% for flats, 4.1% for houses, 11.2% for retail, 9.2% for warehouses, and 4.6% for offices.
Transaction Volume An increasing trend in property sales was observed during the third quarter of 2014. Year-on-year transaction volume increased by 23.2% with transactions recording increases across most Cyprus’ districts. At the national level, 1,115 contracts were deposited during Q3 2014 in comparison to 905 in Q3 2013. The highest increase was recorded in Limassol (48.5%) and the lowest in Famagusta (21.7%) with increases reaching 28.3% in Larnaca and 35.5% in Paphos. In contrast, transaction volume in Nicosia decreased by 24.8% YoY.
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Lending As on September 30th, housing loans represented 55.6% of total outstanding household debt. Outstanding balances for housing loans totaled €13.59bn in September 2014, with 84.4% representing loans to local residents, 0.7% to residents of other Eurozone countries and 14.9% to Third-country (non-Eurozone) residents. Outstanding housing loans decreased by circa 2.2% YoY (Sep/2013 – Sep/2014); a decrease of 2.3% for locals and 1.9% for non-EU residents whilst outstanding loans for EU residents has increase by 4.1%. Building Permits Building permits are considered to be a forward indicator of construction activity and of supply. Compared to the same period last year, building permits (in terms of m2) issued in Q3 2014 decreased by circa 13.4% for residential and increased by circa 0.3% for non-residential/commercial properties. Residential properties represented circa 80% of the total m² licensed during Q3 2014 (144,672 of 181,292m²). Construction Activity Total cement sales reached 104,168 tons in Q3 2014, recording a 13.7% year-on-year drop. The yearto-date/year-on-year decrease in concrete sales reached 17.7%. The average number of registered unemployed in the construction industry reached 6,286 persons in Q3 2014, accounting for 14.6% of total registered unemployed.
2. Overview of Larnaca District 2.1 Larnaca District Larnaca Larnaca, on the south-western part of Cyprus, is the island’s third biggest district in terms of population. Circa 146,300 people reside in its wider area (2011 Census) of which circa 86,400 live in the urban areas. 23% of the population are non-Cypriots. The city of Larnaca is the capital of the district.
2.2 Economy of Larnaca District Larnaca is home to the largest of the Republic’s two international airports. Its seaport is the second largest in the free part of Cyprus. Because of its proximity to the coast it attracts many tourists and has numerous overseas residents who have acquired holiday homes in the district. Larnaca has a service-dominated local economy which relies mainly on tourism, warehouse, logistics and the International Airport. The local economy has been hard-hit by the economic downturn. With the majority of growth in recent years coming from construction and sale of residential units to foreigners, there is an overhang of residential space and an increase in unemployment. There are many plans to regenerate the city, with the most recent being the temporary use of its port as the main hub for the oil and gas exploration vessels.
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3.
Main Report
3.1
Search Parameters
The following table lists the chosen search parameters on which this report is based upon. Search Parameters District Municipality Property Type Price Range Period Price Type Definition
Transaction Type Definition
Larnaca Dromolaxia/Meneou , Kiti, Tersefanou, Softades Total, Land, Residential €10,000+ 2006 Q1 – 2014 Q3 Declared The sale price of a property as referred to in the documentation submitted to the Land Registry or as declared by the parties concerned at the Land Registry. All (Contract of Sale (COS) and Title Deed Transfer) Contract of Sale (COS): A contract of sale/purchase is a document deposited with the Land Registry against a particular property for which no title deed has yet been issued. Title Deed Transfer: A property acquisition with transfer of title deed on the date of the transaction.
3.2 Map (displaying district and selected areas of performed search) The map below displays the district and selected areas of the performed search. Coloured zones depict the ‘selected areas’ within the district according to the specific search performed.
Dimos Dromolaxia-Meneou Kiti
Softades Tersefanou
Source: Google Maps, CEI
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3.3 Statistics 3.3.1 Definition Transaction Volume The Transaction Volume refers to the number of transactions that took place within the time frame specified in the search. It is calculated by retrieving the relevant number of records from the database based on the search parameters (location, price range and property type) and counting them. 3.3.1.1 Total transaction volume across Cyprus and by district
Across Cyprus Ammochostos Larnaka Lefkosia Lemasos Paphos
Transaction Volume During Period : 2006 Q1 - 2014 Q3 Total Residential Flat House Land 146,570 87,996 58,252 29,744 45,182 15,129 12,096 6,558 5,538 2,521 28,509 16,636 11,789 4,847 9,561 36,375 18,568 14,523 4,045 13,736 34,981 17,789 11,396 6,393 11,982 31,576 22,907 13,986 8,921 7,382
Field 30,668 2,159 6,451 8,636 7,981 5,441
Plot 14,514 362 3,110 5,100 4,001 1,941
3.3.1.2 Land transaction volume across Cyprus and in the selected municipalities Transaction Volume During Period : 2006 Q1 - 2014 Q3 Across Cyprus Larnaka Selected Areas Dimos Dromolaxia Meneou Kiti Softades Tersefanou
Total Transactions 146,570 28,509 3,221 123 1,301 103 1,694
Land 45,182 9,561 725 56 477 82 110
Field 30,668 6,451 252 9 81 66 96
Plot 14,514 3,110 473 47 396 16 14
3.3.1.3 Residential transaction volume across Cyprus and in the selected municipalities
Across Cyprus Larnaka Selected Areas Dimos Dromolaxia Meneou Kiti Softades Tersefanou
Transaction Volume During Period : 2006 Q1 - 2014 Q3 Total Transactions Residential Flat 146,570 87,996 58,252 28,509 16,636 11,789 3,221 2,327 1,946 123 61 22 1,301 702 445 103 7 0-N/A 1,694 1,557 1,479
House 29,744 4,847 381 39 257 7 78
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3.3.2 Definitions relating to Median Price Median Price The median price is defined as the middle price of all transactions that fall within the scope of the query requested by the user. For example, if, for a given search, the prices of all transactions were: 3, 3, 4, 5, 7 the median price would be 4 because it is the middle value. The median is the price splitting the upper half of a dataset from the bottom half. 3.3.2.1 Median price across Cyprus and by district
Across Cyprus Ammochostos Larnaka Lefkosia Lemasos Paphos
Total €136,688 €143,522 €124,728 €136,688 €141,218 €136,688
Median Price During Period: 2006 Q1 - 2014 Q3 Residential Flat House Land €150,000 €128,145 €238,000 €90,000 €150,357 €114,476 €230,000 €88,847 €133,734 €119,602 €205,000 €90,000 €153,505 €141,813 €245,700 €85,430 €170,860 €150,000 €250,000 €90,000 €145,231 €114,000 €250,000 €98,000
Field €59,801 €89,280 €68,344 €50,000 €51,800 €70,000
Plot €150,357 €85,933 €130,000 €153,774 €171,000 €167,443
3.3.2.2 Land transaction median price across Cyprus and in the selected municipalities Median Price During Period: 2006 Q1 - 2014 Q3 Across Cyprus Larnaka Selected Areas Dimos Dromolaxia Meneou Kiti Softades Tersefanou
Total €136,688 €124,728 €144,000 €137,450 €150,000 €213,575 €135,832
Land €90,000 €90,000 €153,774 €131,560 €150,000 €247,747 €196,959
Field €59,801 €68,344 €213,575 €250,000 €200,000 €361,489 €205,032
Plot €150,357 €130,000 €136,688 €130,000 €136,688 €239,204 €196,489
3.3.2.3 Residential transaction median price across Cyprus and in the selected municipalities Median Price During Period: 2006 Q1 - 2014 Q3 Across Cyprus Larnaka Selected Areas Dimos Dromolaxia Meneou Kiti Softades Tersefanou
Total
Residential
Flat
House
€136,688 €124,728 €144,000 €137,450 €150,000 €213,575 €135,832
€150,000 €133,734 €140,105 €200,000 €147,284 €340,000 €135,000
€128,145 €119,602 €133,339 €96,500 €141,810 0-N/A €132,230
€238,000 €205,000 €194,750 €282,051 €153,774 €340,000 €287,600
Red Cells Warning: The output provided is based on less than 3 transactions and as such may not be representative of true market conditions
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3.4 Graphs 3.4.1 Definition Transaction Evolution Transaction Evolution is the transaction volume across the time range specified. Whilst Y-axis depicts the number of transactions, the X-axis displays the time period. We notice a downward trend transaction volume of land, both across Cyprus and in Larnaca district. In 2014 there was a very small number of land transacted across all of the selected municipalities (less than 5 transactions per quarter / per municipality). Recorded data shows that the highest number of land transaction in Dromolaxia Meneou took place in the Q4 of 2012 (15 transactions), the highest number of land transaction in Kiti was recorded in the Q1 of 2007 (more than 100 transactions) and the maximum number of land transactions in Softades was recorded in Q1 of 2007 (18 transactions). Analysis of the land transaction evolution in Tersefanou shows that there were no land transaction during the period of 2013-Q3/2014, and there was a total of 110 land transactions during 2006-Q3/2014. The lowest number of land transactions, in the analysed period of time, took place in Dromolaxia Meneou district (56 land transactions in total).
Graph 1: Land Transaction Evolution across Cyprus (2006 Q1 - 2014 Q3)
Graph 2: Land Transaction Evolution in Larnaca District (2006 Q1 - 2014 Q3)
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Graph 3: Land Transaction Evolution in Dimos Dromolaxia-Meneou (2006 Q1 - 2014 Q3)*
Graph 4: Land Transaction Evolution in Kiti (2006 Q1 - 2014 Q3)
Graph 5: Land Transaction Evolution in Softades (2006 Q1 - 2014 Q3)
Graph 6: Land Transaction Evolution in Tersefanou (2006 Q1 - 2014 Q3)
* Dromolaxia and Meneou, prior to their merger in October 2011, were separate communities. Transaction evolution is not available for the period before the merger.
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We notice a downward trend in residential transaction volume, both across Cyprus and in Larnaca district, in the selected period of time. In 2014 there was a very small number of residential transactions across all of the selected municipalities (less than 5 transaction per quarter in Kiti, and less than 10 transactions per quarter in Tersefanou and Dromolaxia Meneou). The highest number of residential transactions in Dromolaxia-Meneou was recorded in Q2 of 2012 (11 transactions). Residential transaction volumes in Kiti and Tersefanou dropped significantly after the 3rd quarter of 2008. During the analysed period of time, there was a total of only 7 residential transactions in Softades.
Graph 7: Residential Transaction Evolution across Cyprus (2006 Q1 - 2014 Q3)
Graph 8: Residential Transaction Evolution in Larnaca (2006 Q1 - 2014 Q3)
Graph 9: Residential Transaction Evolution in Dimos Dromolaxia Meneou (2006 Q1 - 2014 Q3)*
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Graph 10: Residential Transaction Evolution in Kiti (2006 Q1 - 2014 Q3)
Graph 11: Residential Transaction Evolution in Softades (2006 Q1 - 2014 Q3)
Graph 12: Residential Transaction Evolution in Tersefanou (2006 Q1 - 2014 Q3)
* Dromolaxia and Meneou, prior to their merger in October 2011, were separate communities. Transaction evolution is not available for the period before the merger.
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3.4.2 Price Distribution A statistical distribution describes the numbers of times each possible price occurs in the set of data analysed. The quartiles of a ranked set of data values are the four subsets whose boundaries are the three quartile points. At the middle of the data values is the median and on either side of it is the upper and the lower quartile. The median price and the lower and upper quartiles show the skewness of the distribution, which basically means the probability of a value falling with on either side of the median value. 
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The price distribution graphs in Kiti and Tersefanou (graphs 16 & 18) indicate signs of volatility. This is mainly due to rapid changes in prices and shifts in the distribution of sales (increased sales activity in specific price ranges) between quarters. The price distribution graphs in Dromolaxia Meneou and Softades (graphs 15 & 17) indicate signs of volatility due to a small number of land transactions, which makes it impossible to run an accurate analysis of the median price and upper and lower quartile (transactions number may not be representative of true market conditions).
Graph 13: Price Distribution - Land (Cyprus)
Graph 14: Price Distribution (Land) in Larnaka (2006 Q1 - 2014 Q3)
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Graph 15: Price Distribution (Land) in Dimos Dromolaxia Meneou (2006 Q1 - 2014 Q3)
Graph 16: Price Distribution (Land) in Kiti (2006 Q1 - 2014 Q3)
Graph 17: Price Distribution (Land) in Softades (2006 Q1 - 2014 Q3)
Graph 18: Price Distribution (Land) in Tersefanou (2006 Q1 - 2014 Q3)
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The price distribution graphs in Kiti and Tersefanou (graphs 22 & 24) indicate signs of volatility. This is mainly due to rapid changes in prices and shifts in the distribution of sales (increased sales activity in specific price ranges) between quarters. The price distribution graphs in Dromolaxia Meneou and Softades (graphs 21 & 23) indicate signs of volatility due to a small number of land transactions, which makes it impossible to run an accurate analysis of the median price and upper and lower quartile (transactions number may not be representative of true market conditions).
Graph 19: Price Distribution (Residential) in Cyprus (2006 Q1 - 2014 Q3)
Graph 20: Price Distribution (Residential) in Larnaka (2006 Q1 - 2014 Q3)
Graph 21: Price Distribution (Residential) in Dimos Dromolaxia Meneou (2006 Q1 - 2014 Q3)
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Graph 22: Price Distribution (Residential) in Kiti (2006 Q1 - 2014 Q3)
Graph 23: Price Distribution (Residential) in Softades (2006 Q1 - 2014 Q3)
Graph 24: Price Distribution (Residential) in Tersefanou(2006 Q1 - 2014 Q3)
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3.5 Thermal Map
The highest volume of transactions took place in Tersefanou, while the lowest volume was noted in Softades. The highest transaction density (per 10 km2) was recorded in Kiti. The lowest density was in Dromolaxia Meneou. Transaction density per population (per 1000 persons) was the highest in Dromolaxia Meneou, and the lowest in Kiti. The highest transaction values were recorded in Softades.
Map 1: Transaction volume in the selected municipalities (2006 Q1 - 2014 Q3)
Tersefanou
Dimos Dromilaxia Meneou
Softades
Kiti
Source: Google Maps, CEI
Map 2: Transaction Density (Area) in the selected municipalities (2006 Q1 - 2014 Q3)
Tersefanou Dimos Dromilaxia Meneou
Kiti Softades
Source: Google Maps, CEI
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Map 3: Transaction Density (Population) in the selected municipalities (2006 Q1 - 2014 Q3)
Tersefanou Dimos Dromilaxia Meneou
Kiti Softades
Source: Google Maps, CEI
Map 4: Transaction per price distribution in the selected municipalities (2006 Q1 - 2014 Q3)
Tersefanou
Dimos Dromilaxia Meneou
Kiti Softades
Source: Google Maps, CEI
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4. Profile of CEI Cyprus Economic Intelligence (CEI) has developed a logical system of processing the Land Registry's dataset in order to extrapolate from it more accurate information as to the dynamics of Cyprus’ property market. This is a process whereby the CEI team manually reviews each and every single entry recorded by the Land Registry, re-labels the property according to its actual status (as documented by the Land Registry) and removes duplicates and non-market transactions. This process has been carried out for all transactions recorded by the Land Registry from 2006 onwards. Starting off with a sizeable database, with it having some known impurities and inaccuracies, we have filtered these entries in order to produce a more accurate dataset to analyse. Whilst this dataset may still contain some of the impurities and inaccuracies of the original database, their number is considerably reduced thus increasing the accuracy of the dataset.
5. Contact Details Cyprus Economic Intelligence Unit A41 30 Chytron Street 1075 Nicosia Cyprus
T +357 22 250 554 F +357 22 250 583 W www.cei.com.cy E info@cei.com.cy
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