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Property sales continue to weaken

Figures published yesterday by the Department of Lands and Surveys reveal that property sales continue to weaken with the number of properties sold during May falling for the eleventh consecutive month.

FIGURES published yesterday by the Department of Lands & Surveys show that the number of property contracts deposited at Land Registries throughout Cyprus in May 2011 was 697 compared with the 803 deposited in May last year; a fall of 13%.

Although this fall is less than previous months, property sales have been falling steadily for the past eleven months with no signs of a much-needed recovery on the horizon.

During the first five months of 2011 property sales are down by nearly 16% compared with last year and are now just 5% higher than the number sold during the first five months of 2009, which was the poorest year for sales since 2002.

With the exception of Limassol, where sales in May were up nearly 37%, sales were down in all areas. Nicosia and Paphos saw sales falling by 33.2% and 32.9% respectively, while sales in Larnaca fell by 26.2% and those in Famagusta fell by 13.6%.

The sharp contraction in demand has left thousands of unsold properties built in the last three years littering the landscape and many partly completed projects have been mothballed.

The economic situation in Cyprus is not helping the property market.

Unemployment reached 7.6% in April, the highest rate increase over the past year boosting fears that it will take longer for the gradual recovery in the economy to impact the labour market. Young people face the biggest unemployment problem with 1 in 5 of the under 25s out of work.

The Island’s inflation hit a 29-month high in May. The Cyprus Statistical Service reported that inflation in May 2011 stood at 3.88% up from 3.28% in April 2011 and 1.61% in May 2010. This is the highest increase since October 2008.

Source: Department of Lands and Surveys

While interest rates and property prices remain high, the outlook for domestic sales is not promising. If sales do not improve, 2011 could prove to be a worse year than 2009.

Overseas sales

Unlike domestic demand, foreign demand for property continues to improve. Property sales to foreign buyers increased in May with a total of 187 contacts in favour of foreigners being deposited compared with 154 in May 2010; a rise of 21%.

With the exception of Paphos, where sales in May fell 38% compared with last year, sales are up in all areas. Nicosia led the way with sales up by 86% followed by Famagusta (+71%), Limassol (+ 49%) and Larnaca (+21%).

During the first five months of 2011 property sales to foreigners are up 17% on last year’s figures.

Source: Department of Lands and Surveys

Readers' comments

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  • Andrew says:

    Maybe they would sell a lot more property if they issued Title Deeds at the point of sale.

    Waiting for years for something you have paid for in full. Waiting fearful of the knock on the door from the developers bank not knowing if they have repaid their debt, is not a good recipe for sales.

  • @Cyprus Expat – I agree. Limassol is a far more mature and cosmopolitan market than those you find in the other coastal towns.

    Russians have been here for many years – and as a friend of mine said who has part of business in Moscow all Russians need to do if they want money is dig a hole in the ground and it comes flowing out.

  • Richard says:

    @Mike..

    I have to wonder with Christofias’ Russian connections going way back – if this has not all been carefully crafted right from the start.

    Fidel Castro did a similar number with Nikita Khrushchev back in the 1960’s.

    Bizarrely – back in those days – Castro looked to support his lofty visionary ideals with support from a Communist state. Nowadays – support for Russian money & dealings in Cyprus looks more akin to General Battista’s Cuba that was a whorehouse and gambling den for wealthy decadent Americans to let off steam.

    Funny old world eh?

  • Cyprus Expat says:

    Limassol seems to be the place to buy at the moment, as prices are holding their own.

  • Mike says:

    Probably explains why Limassol is now a Russian speaking Town. All the 5 star Hotels in Town are packed with Russian visitors whereas the rest of the establishments are almost dead. Paphos and Larnaca appear to have died a death too.

    The Rouble is slowly buying up the commercial hub of Cyprus bit by bit. Without their continued support and import of their vast, recently accumulated, wealth I think the Island would be in dire straights. Whether or not that wealth is deemed to have been acquired by fair, legal and morally acceptable means I’m sure is of no consequence to any financial house as long as they get their fees so I guess we had all better learn to speak Russian and service their needs. I see some Russian shops have already opened up & are doing a roaring trade.

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