According to the latest Royal Institution of Chartered Surveyors (Rics) Property Price Index, the worst hit area was Limassol, where apartments shed 3.4 per cent of their value and the cost of buying a home fell by 2.3 per cent.
Pavlos Loizou, of Rics Cyprus, explained the ongoing eurozone crisis and difficulties within Cyprus are the two main factors dragging the real estate sector in the country lower.
"The worsening state of Cyprus' economy and the growing political and economic uncertainty across the eurozone led to a pronounced slowdown in mortgage and corporate lending and a further rise in the rate of unemployment," he stated.
In addition, foreign investors have been largely staying away from property in Cyprus, with many choosing to put their money into a safe haven location, or waiting to see how the situation develops.
Along with the slowdown in the real estate sales market, the construction industry in the country is also suffering.
Cyprus Property News recently reported that the number of building permits issued in May was down by 10.6 per cent annually, with the value of these permits declining by 27 per cent during this period.