You are here:  Home  >  Cyprus  >  CY Social  >  Current Article

Value of net wealth in Cyprus households decreases by 40% in 2014

By   /   23/12/2016  /   Comments Off on Value of net wealth in Cyprus households decreases by 40% in 2014

The value of net wealth decreased by 40% in Cyprus in 2014, recording the largest decrease in the median value of wealth throughout Europe, according to the Household Finance and Consumption Survey (HFCS), published Friday by the European Central Bank (ECB).

According to a relevant article by the Central Bank of Cyprus (CBC), the fall in net wealth was mainly driven by a reduction in the value of real estate and the impairment of deposits in 2013.

The comparison was made with data of the first wave of the corresponding survey, conducted in 2010. The survey involved a total of 20 EU countries and responses were received from 84, 000 households. Cyprus participated with 1289 households.

The downturn of the gross income of households was at the same levels, with the median value having the greatest reduction of all countries reaching 34.2% ( € 22,700). As a result, the Cypriot households rank considerably lower than the EU-wide median value which was € 29, 200, while other countries with lower incomes are Greece, Portugal, Slovenia, Slovakia, Estonia and Latvia.

In particular, according to the survey, between 2010 and 2014, the median value of total real assets in Cyprus dropped by 34.9%, the second largest in Europe after Greece (35.9%), due to the significant drop in real estate prices. The survey results show that the median value of other real estate decreased by 32.7% and the median value of primary residence decreased by 22.1%.

The percentage of ownership of real property fell between 2010 and 2014. The largest decrease was in possession of real estate in addition to the main house (5.7%) and in the main house (3.2%).

Reduction in financial assets of households

————————————————– ————————–

In 2014 there was a decrease in the households who had any financial asset by 5.2 percentage points, with Cyprus marking the largest drop among the countries surveyed.

Particularly there was a decrease by 5 points in households that had deposits and an even greater reduction of 26.1 points in households that had voluntary pension / life insurance plans. Cypriot households rank third from the end in having financial assets.

But while there is a significant reduction in the value of total financial assets (-33%), deposits increased significantly, almost doubled. This is explained partly by the huge decrease of 42.2% in the median value of voluntary pension / life insurance plans, which the households most likely chose to sell and to maintain as deposits.

Reduction in credit liabilities

Credit liabilities of households, dropped by 6.3 points, largely due to the consolidation of deposits and loans with the same means of 2013 in Laiki Bank, as well as the lack of new loans in market.

A significant downturn of 10.9% was recorded in the possession of non-mortgage loans, as consumption loans, suggesting that households are more cautious in lending for occasional purchases.

Despite the decline of households with debt, the median value of total household liabilities shows an increase of 17,7%, which probably indicates the repayment of low and medium-value loans, as well as the high lending rate, as a result in delayed debt repayment. The biggest growth, both in value and as a percentage (46.3%) was recorded in other mortgages, except from the main house./IBNA

You might also like...

UK “open to any security arrangement” agreed by Cypriots, says Sir Alan Duncan

Read More →