Residential property prices in Cyprus dropped by 9.4% between the third quarter of 2008 and the fourth quarter of 2010, according to the quarterly bulletin of Residential Property Price Indices, issued by the Central Bank of Cyprus.

The drop in prices follows an increase by 53.7% between the first quarter of 2006 and the third quarter of 2008. According to CBC, house prices showed relatively larger fluctuations than apartment prices.

It is further noted that Residential Property Price Indices record a positive correlation with the annual changes in Cyprus’ GDP, and in particular, the index records changes ahead of GDP adjustments.

Thus, the index recorded its first negative annual change in house prices during the first quarter of 2009, that is a quarter before Cyprus’ GDP recorded negative rate during the second quarter of 2009. According to CBC, the biggest increase in house prices between the first quarter of 2006 and third quarter of 2008 was in Famagusta, by 88.1%.

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