During the third quarter of 2014 the Cypriot economy showed some signs of stability, with the economy’s performance being better than expected at the end of 2013 and tourism outperforming forecasts.

Unemployment remained at a historical high level, stabilising at 17-18%, while further decreases in salaries were recorded, and discussions were ongoing regarding the revised Immovable Property Tax, and the foreclosure bill. At the same time, Bank of Cyprus raised an additional €1bn to shore up its capital base.

Regarding the property market, there was a lack of transactions during the third quarter, especially amongst local buyers and even those that were interested in buying were unable to access bank-finance or large deposits.

The Property Price Index has recorded falls in almost all cities and asset classes, with significant falls being recorded in Nicosia. Across Cyprus, residential prices for both houses and flats fell by 1.6% and 1.0% respectively, with the biggest drop being in Nicosia (3.4% for houses) and Limassol (1.5% for flats).

Compared with a year ago, flat prices dropped by 6.3% while house prices fell by 4.4%. Rents also fell, down 1.2% in Q3 for apartments and 0.9% for houses, while over the past 12 months they are down by 4.7% and 4.1% respectively.