THE COLLAPSE of property sales to non-Cypriots must be very worrying for the Cyprus Government. No doubt affected by the financial crisis and reports about the various scams practised by property developers, the flow of foreign currency into the economy is diminishing rapidly.
The decline in external demand for property is reflected in the latest Land Registry figures. Contracts of sale deposited by non-Cypriots during the first five months of the year show that all municipalities are having similar problems, with an ever increasing number of unsold apartments and houses.
Real estate agents and developers in Paphos say that some sales are the result of Britons selling up and moving elsewhere. Taking advantage of the Sterling/Euro exchange rate, those with Title Deeds are asking much less for their properties in order to sell.
The Real Estate Agents Honorary Chairman, Elias Danos believes that pre-crisis prices will not return.
Mr Danos said that the property market in 2007 and 2008 was a “bubble as a result of the capital of €3 billion injected in the Cypriot market after the approval of the amnesty by the Parliament. This led to an abnormal increase in property prices, which instead of increasing around 10% per annum, they increased by 50% each year“.
According to Mr. Danos’ estimates, “prices will start recovering in the second quarter of 2010, if the climate in the international market improves. Before 2010, market will not recover fully“.