Those in the property business expect that the decline in prices will reheat activity in the Cyprus property market. References to price decreases, which were a taboo subject for estate agents and developers until recently, are now significant weapons in efforts to boost demand.
Although official data shows a drop in activity of more than 60%, those in the property business talk about increased mobility in the past few weeks. They insist that improvements in market conditions are linked to increased domestic demand.
Chairman of the newly-established Association for the Promotion of Property Development, Giorgos Mouskides stated today that “demand in Nicosia concerns flats and houses, in Protaras and Ayia Napa summer houses by Nicosia residents and in Limassol flats and houses by Cypriots and Russians. On the other hand, the interest by Cypriots in Larnaca and Paphos is lower, with the exception of certain areas such as Pervolia“.
Mr. Mouskides was not in a position to provide figures on the increased demand or the trends in each municipality.
As for the drop in prices, he stressed that it was “a result of the plethora of unsold housing units in relation to the downturn in demand especially in the tourist areas“.
Mr. Mouskides supported the view that competing countries such as Spain and Greece play a significant role, as do the pressures that the banks exercise on developers, who are forced to sell their properties at lower prices, while bigger opportunities are seen in used houses sold by the non-Cypriots especially the British.
“In Nicosia, although prices in the city centre and the suburbs are stable, in certain areas they have dropped by 5-10%. A Larger decline of up to 15% is observed in the used houses and flats”, he noted.
“In other regions, the price decrease stands at 15-20%, in used houses and flats mostly“, he added.
Analyzing the reasons that push demand up, Mr. Mouskides said that this is attributable to the Cypriots’ mood to look for opportunities, the more attractive housing loans granted by the banks and the government’s measures to boost the property sector. “The government’s announcement for the construction of big projects such as golf courts and marinas and the upward trend in the Cyprus Stock Exchange in the past two weeks contributed significantly towards this direction“.
Finally, Mr. Mouskides stressed the need for a cut in taxes and VAT, capital gains tax that stands at 20% and transfer fees at 8%. There is also a need to hasten the procedures for issuing Title Deeds, which can take anything from 3 to 20 years.
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