The number of building permits fell again in July compared with the same month of 2004, reaching a total of 614, or a drop of 2.4% on July 2004.

However, demand appears to be buoyant, as the value and area of building permits authorised continues to grow apace, suggesting that in the residential sector developers are concentrating on apartment blocks, rather than individual houses.

The value of building permits rose in July by 20.7% year on year, while the area rose by a similar 21.3%.

In the January-July period, the number of dwelling units was up 27.1% compared with the same period of 2004, while the value was up 15.2% and area up 12.9%. This compares with a rise of just 2.7% in the number of building permits authorised.

Meanwhile, the good news for house-buyers is that residential prices, as measured by the BuySell Home Price Index, recorded only a slight month-on-month rise of 0.1% in September and a slight year-on-year fall of 0.4% in the same month.

The index appears to have been on a slight declining trend since June 2005, despite large cuts in interest rates this year.

However, they are still 1.5% higher than in January. teh average price of a home in Cyprus is now CYP 84,490.

Dr Stelios Platis, Director of S. Platis Economic Research and the economist who devised and produces the BuySell Home Price Index, gives a number of reasons for the trend.

First, he is not alarmed by small changes in the index.

“What the index is saying is that prices have been stable in nominal terms for one and a half years, since May 2004,” he told the Financial Mirror.

Moreover, interest rates take time to have an impact on demand.

However, he also notes that there seems to have been a shift in demand away from property.