Signs of stabilisation in residential property prices.

• The continued deceleration of the quarterly decreases in the RPPI indicates a path of stabilisation in prices.
• Specifically, the RPPI (houses and apartments) recorded a marginal decrease of 0,3% in 2015Q3. While apartment prices recorded their first quarterly increase since 2009Q4 (0,8%), this was compensated by the reduction in house prices of 0,7%.
• On an annual basis, the RPPI recorded a decrease of 3,7% in 2015Q3, compared with decreases of 5% and 6,5% in 2015Q2 and 2015Q1, respectively.
• The recovery of the economy, the improvement in financial conditions, the lower lending rates and the improved framework for more efficient issuance of title deeds are expected to have a positive effect on the demand for properties and their prices.

Residential property price indices

During 2015Q3 the decelarating trend in price decreases continued, with the RPPI recording a marginal decrease of 0,3%, compared with quarterly decreases of 0,4% and 1% in the previous two quarters. House prices decreased by 0,7% on a quarterly basis, while apartment prices increased by 0,8% in 2015Q3 (Chart 1). The quarterly increase in apartment prices is the first since 2009Q4. Provided that the economy continues to recover, unemployment continues to fall, and the financial soundness of the banks improves, prices will most likely stabilise around the average price levels of 2006, the year in which the over-lending for housing began, resulting in the overheating of the sector.
On an annual basis, the RPPI declined by 3,7% in 2015Q3, compared with a decline of 5% in 2015Q2.
House prices declined by 3,9% on an annual basis and apartment prices by 2,8%, compared with annual declines of 4,6% and 6,2%, respectively, in 2015Q2. Chart 2 shows the deceleration of the annual decreases since 2014Q1.

Download the full PDF Residential Property Price Index Q3 2015