THE Royal Institution of Chartered Surveyors (RICS) has announced that the RICS Cyprus Property Index is in its final stages of completion and is expected to be launched by the end of the month.
The project is currently selecting the property portfolio on which the index will be based, with experts and academics in the process of perfecting the methodology. The Index will cover apartments, homes, offices, commercial and industrial properties and has been commissioned to the University of Reading. It will be published in cooperation with the Association of Quantity Surveyors and Construction Economists (SEEOKK).
“The transparency that the Cyprus Property Index can offer, is a shield for the avoidance of economic crises like the one the world is currently facing,” said SEEOKK president Leda Philippidou.
“The Cyprus real estate sector cannot bounce back unless the basic parameters, upon which it functions, remain unsatisfactory,” added RICS Cyprus executive board member Pavlos Loizou MRICS, of Antonis Loizou & Associates. He added that the question of trust in the real estate sector must be the primary concern to all those involved. “Of course, trust without strict rules and transparency cannot exist. The creation of the RICS Cyprus Property Index will provide the necessary transparency that the market needs, so that buyers and investors can regain their trust.”
With reference to practices that are applied abroad, Loizou explained that “there are a plethora of property indexes for real estate that use different methodologies, and target specific types of real estate. Investors and funding organisations select an index, which is always based, however, on clear parameters.”
The United Kingdom’s Financial Services Authority (FSA) informed RICS Cyprus that there is no common index used by the banks and cooperatives. They use their own index, for example, Barclays, Halifax etc. while other organisations use either the Investment Property Databank (IPD – based on re-evaluations of specific real estate and is similar to the pipeline for Cyprus) or on indices produced by consulting companies (also similar to the one proposed by RICS Cyprus).
Reading university & Dr Pat McAllister
Reading University is home to the largest school in the UK for teaching and research in real estate and planning. The department was established in 1968, and enjoys worldwide recognition for excellence in both teaching and research. The Index was designed by Dr Pat McAllister, whose interests include real estate pricing and appraisal, European integration and international property investment, real estate development, environmental certification and real estate pricing. He is currently the programme director for flexible MSc courses and the package director for Urban Property Management and Valuation.
BuySell home price index
Cyprus has been without a property price index since the demise of the BuySell Home Price Index at the end of March last year. MAP S. Platis, the organisation that produced the Index on behalf of BuySell, announced:
“In anticipation of an official Index from the Statistical Service of the Republic of Cyprus, the BuySell Home Price Index shall stopped being produced, as of the first quarter of 2009”.
Many questioned the validity of the BuySell Index. It was based on a combination of prices at which properties were being offered for sale as well as the actual prices they achieved. Also, as agents acting on behalf of those selling property, many felt that BuySell were motivated to report a higher Index than the true reality of the situation.
Association of commercial banks property index
The Association of Cyprus Commercial Banks has announced that the general property index is being prepared with the cooperation of the Central Bank of Cyprus. But as with the BuySell Index, questions have been raised regarding their motivation and the impartiality in the production of a property price index.