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Domestic property sales decline in September

Figures published yesterday by the Department of Lands and Surveys reveal that the number of properties sold in the domestic market is declining in the second half of the year.

THERE appears to be a declining trend in the domestic sales of property in Cyprus. Although the overall annual growth remains in double-digits it seems probable that the market will slowdown and further deteriorate by the end of the year.

Cyprus property sales to the domestic market in the first half of the year had increased by 26.8% compared to last year and there was much optimism about its future.

However, for the third consecutive month domestic sales have declined in spite of falling prices, other sales incentives and distressed sales. This decline has more than halved the overall increase this year, which by the end of September had fallen to 11.4%.

During September, the number of contracts of sale in favour of Cypriot buyers deposited at Land Registries throughout Cyprus was 507 compared to the 584 deposited in September 2009; a fall of 13.2%.

The worst hit district was Larnaca, where sales fell by 27.8%. Larnaca was followed by Paphos (down 19.6%), Famagusta (down 19.3%), Limassol (down 7.2%) and finally Nicosia (down 6.3%).

Domestic property sales in Cyprus 2009-2010 comparison

Source: Department of Lands and Surveys

If this declining trend continues it seems probable that domestic sales for this year will only be marginally better than those achieved 2009, which was the poorest year for sales on record since 2002.

Budget measures

On Monday Finance Minister Charilaos Stavrakis presented the state’s 2011 budget to House President Marios Garoyian describing it as “the tightest in the past 30 years”.

According to a report in StockWatch one of the measures the government plans to introduce is an increase in property tax, which will bring in additional revenue amounting to €10 million. It has also been rumoured that the government plans to increase VAT to 16 percent.

Should these measures be implemented it seems likely that property prices will increase and that the domestic market will remain depressed until the economic situation improves.

Readers' comments

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  • Andrew says:

    What the glossy brochures do not say.

    Developers start a site by taking deposits, then they build houses that they have not yet taken deposits on. This leaves the original deposit payers in limbo on unfinished sites, often with unfinished houses.

    Banks then give mortgages to developers on the value of the remaining land and the newly completed houses, which do not yet have buyers.

    Lawyers prepare contracts of sale for these latest houses and do not conduct encumbrance searches.

    Land registry accept these contracts and do not “flag up” the Banks pre existing charge on the land.

    Result Developers get Paid. Banks get their loans underwritten by unwitting buyers, Lawyers get paid for the original contract then they get paid again to try and sort the problem out. Land registry (THE BEST IN THE WORLD) collect taxes and the Buyers get stuffed.

    Simples…………….

  • Mike from UK says:

    I agree with Paul. I have written to my MEP and am awaiting a response which i will share.

    If not satisfied with response I will be arranging appt to see him.

    One comment I did make was that as a British Taxpayer and helping to fund British bases on Cyprus, perhaps the Cyprus Govt should remember this when they treat British Citizens so shamefully!

  • Cyprus Expat says:

    This government is probably stalling on the title deeds issue, knowing it will probably lose the next election, then it’s somebody else’s problem.

    And so the beat goes on!

  • Matt says:

    * Russians step in..
    * Double Taxation Treaty will be agreed..
    * Plenty of cheap houses for sale..
    * Problem solved

    ..and no title deeds for the rest of you for the next 20 yrs !

  • paul ruse says:

    I have written this before and will again.

    Now is the time when they are weak to pile on the pressure write to your Euro MP tell them your problem explain it’s not just you but the whole of the property market in Cyprus. Not just developers but lawyers and estate agents. It’s no good fixing part of the problem. It has all got to be put right and backdated so previous victims can get justice.

    You have to do it now !. or don’t complain.

  • Costas Apacket says:

    Hi Vah,

    You make a very valid point, but I don’t think it’s just the volume of work that prevents the issuing of Title Deeds.

    Our mate, Mr Silicosis, promised that 20,000 extra Title Deeds would be issued by July 2010, but it’s all gone quiet now.

    There is something else that prevents the issue of Title Deeds that the colluding Government, Banks, Lawyers and Developers do not want revealed.

  • vah says:

    Presumably, given plummeting sales numbers the Land Registry has less properties to register, consequently they have caught up with the backlog of Title Deeds to issue.

    I won’t hold my breath.

  • Dee says:

    So when sales are at an almost, all-time low, our government thinks they’ll increase revenue by topping-up the property-tax and VAT.

    Only in Cyprus………..

  • Peter says:

    And with the drop in sales is the knock-on effect.

    People don’t need the white goods, they don’t need the cars, they don’t eat at the local tavern as they move to other countries, Spain, Portugal France.

    The workers to build the homes and villas are left unemployed, the service sector is effected as employment evaporates. So the prices go up?

    And things will only get worse, the word is out “Buy in Cyprus and you will lose your home”

    It will take at least a generation to recover, but only after the problem is addressed. The toxic debt will sink this Country before the EU steps in.

  • Jim says:

    I am just wondering when a property lending debt crisis similar to Ireland, is going to hit Cyprus.

    In my opinion it’s not a matter of if, it’s when?

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