SPEAKING to Bloomberg recently, the vice president of the Cyprus Association of Valuers and Property Consultants Kyriakos Talatinis said that “In the first half of 2011, home prices overall will remain unchanged compared with 2010” and that “Domestic demand will depend on whether banks keep their rating standards the same or tighten them”.
Mr Talatinis also believes that external demand will remain weak and prices will fall in most coastal areas.
According to a statement on the Central Bank’s website, mortgages rose at an annual rate of 15% reaching €14 billion in November. Capital Gains Tax receipts rose 19% during the first eleven months of 2010 following a fall of 75% in 2009 which resulted from the 80% crash in property sales during the year.
Well no good moaning to each other get onto to your MEPs and UK MP they will I suggest get tired of us and put pressure on to the Cyprus government. One thing is for sure nothing will happen if you don’t do something.
I agree a lot is wrong, just like the vat hike, the untouchables are the civil servants in all these cases, reduced pay rises, no pay cuts per say and accountability of zero…great
@ Dimitri.
I feel that I have to correct you.
Your last words state that, ‘Something is not right.’ Regrettably, EVERYTHING ‘is not right’, and I refer, of course, not only to the behaviour of developers, but also lawyers and banks. However, all roads lead to government as it is this body which is ultimately responsible for allowing all the corrupt practices in the property market to flourish. Unless and until strong action is taken, for ‘stabilise’ read whatever is left of the market disappearing into a Black Hole – if it hasn’t already done so.
Unfortunately, the President is in a strait-jacket and seems either unwilling or incapable of breaking free and in effect crushing the vested interests that have ruled this island. Make no mistake, I use the word ‘crushing’ in its literal sense. Chief among them are the lawyers whose numbers make up the majority in the Cypriot Parliament. Need I say more?
Added to this is the seeming endgame of the intractable Cyprus Problem and we have a cocktail of potential, total catastrophe.
There’s also the question of exactly whether or not the EU is prepared to act and take meaningful action. Others more qualified than I can probably address that issue but the immediate omens don’t seem too hopeful on that score either.
In conclusion, any organisation is dependent on decisive and firm leadership and I don’t think it’s likely to materialize in Cyprus any time soon…
@Peter. I agree with your view of the headline problem being Title Deeds, plus ‘double selling’ and other fraud. The three main foreign buyer groups so far have been in order of numbers Brits, Russians and Iranians and it is the volume of purchases of these three groups combined that has disappeared. The rapid loss pre-dates the world financial crisis and is attributable to the Cyprus deeds/fraud issue becoming common knowledge in the UK, Russia and Iran.
The new legislation aiming to rectify the TD problem cannot succeed in attracting new foreign buyers unless and until the backlog of 130,000+ TDs are cleared, since it is that very backlog and all it entails that frightens buyers away. The new legislation appears to exclude pre-existing purchases and the TD backlog. Like you, I know some normally intelligent Cypriots who are in total denial not only of this blindingly obvious fact but also that the developer mortgage debt (Euro 7bn?)is a problem that could push Cyprus towards an ‘Iceland’ crisis. How is it possible for the Cyprus banks to be still offering between 3.9 and 4.6% interest on deposits, twice the rate of other EU states. Answer: a bubble of virtual money and a huge gamble.
Don’t the banks ever have a charge on the developers’ personal property? Pity, it would be good to see some of them run the risk of losing their own homes.
I disagree Steve the main problems is the Title Deeds and there is no sign of this problem being sorted.
I talk to some intelligent and presentable Greek Cypriots who appear totally unaware of the state of the economy or the bleak future in store for Cyprus.
Yes the value of Sterling may make a difference in Spain or Portugal, but not in Cyprus.
This place has shot itself in the foot big time.
There is the habit out here where sellers do no budge from their asking price, no matter how ridiculous the price is….and the banks are just as bad with any developers who have problems with repayments, instead of re-possessing they take a namby pamby approach in the hope that the developer will somehow as if by magic pay off his debts….the banks keep these guys sweet….not right, but then again the Cypriot banks do not like to be seen as heartless and throw people out on the streets who cannot afford payments etc…but with developers in trouble they need to look at the assets these people have, all driving around in top of the range cars, yet owing thousands if not millions..something is not right…
If it’s prediction time again, I may as well have a go. The main influence on Cyprus COASTAL property sales and the direction taken by prices will be ………
The GB Pound / Euro exchange rate.
Yeah; stabilize……….downwards. Who’s he trying to kid?
@Denton – the figures are in the spreadsheet that you can find at http://www.centralbank.gov.cy/media/xls/MonetaryandFinancialStatDec10ENGnew.xls
The housing loans are shown in worksheets T6, T6.1, T6.2 and T6.3
Unfortunately, spreadsheet doesn’t show developer borrowing.
Nigel, the Euro 14 billion for mortgage debt is interesting but I just could not find any reference to it on the CB website. Does it also break down the 14 billion to show developer mortgages/lending?
Property prices will indeed stabilise, or rather stagnate during 2011 , because people don’t want to buy a property without Title Deeds and existing home owners can’t sell without Title Deeds.
No purchase and no sales equals stability, I guess.