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Disastrous decline in real estate market continues

The continuing crisis in the Cyprus real estate industry can only be described as disastrous as the latest figures released by the Land Registry reveal that property sales fell for the thirteenth consecutive month in July.

ACCORDING to Land Registry figures published earlier today, the number of contracts deposited at Land Registries throughout Cyprus in July for the purchase of property fell by almost a quarter to 605 from the 797 deposited in the same period last year. July was the thirteenth consecutive month during which sales have declined.

Compared with last year, total sales this year have fallen 19.7% to 4,182 from the 5,205 sold during the same period of 2010. Sales are now down by almost 7% on those of 2009, the year the market crashed, when 4,493 properties were sold over the first seven months of the year.

During July, sales fell in all areas. Worst hit was Paphos, where sales tumbled 39.3% compared with July last year. Paphos was followed by Nicosia (-33.7%), Limassol (-18.4%), Famagusta (-8.3%) and Larnaca (-7.0%).

Source: Department of Lands and Surveys

The Federation of the Building Contractors Associations of Cyprus (OSEOK) announced last Friday that turnover is declining, contracting companies are terminating or suspending their operations and that unemployment in the sector is increasing dramatically. It expressed its concerns that if no immediate measures are taken to support the construction sector, the impact on the sector and the economy will be “tragic with dimensions that will have huge economic and social costs”.

Overseas sales

PROPERTY sales to foreign buyers also fell in July with a total of 122 contacts in favour of foreigners being deposited at Land Registries compared with 167 in July 2010; a fall of 26.9%.

Although property sales were up 56.3% in Larnaca, they fell in all other areas. In Famagusta, sales more than halved, falling 52.4% compared with July last year. Famagusta was followed by Paphos, where sales fell by 37.0%, Nicosia (-36.7%), and finally Limassol (-12.1%).

Source: Department of Lands and Surveys

During the first five months of the year overseas property sales were up 17% compared to last year. However, the sharp decline in sales during June and July has resulted in the year-to-date improvement in sales falling to a mere 0.3%.

Readers' comments

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  • mbEyes says:

    @Nigel
    Or, hey! How about a system that inspects buildings AS THEY ARE BEING BUILT? So no one ever buys a house which is illegally built. Sorry to be so simplistic.

    @Nigel again – as most people caught by planning/title deeds/developer mortgages problems are indigenous, why has there not been more vociferous outcry from them? Are we reaching out to these people to create and even more effective, collective ‘voice’?

  • @Mike – thanks for your comment. There are far more Cypriot buyers who have been caught by the nefarious practices of developers, lawyers and banks than foreign buyers.

    But I agree with your point that the government should address the root cause of the issue – but it seems it either lacks the will or the ‘intestinal fortitude’ to do so.

    I do not understand why the government cannot change the system so that Title Deeds are available on delivery of a property – this would remove many of the problems people are forced to endure.

    My house has now been inspected four times:

    1. By the Planning Authority for the Final Certificate of Completion.

    2. My village mukhtar who had to check that I had a pavement outside my house.

    3. The Land Registry who checked that the property was correctly located on the land.

    4. The Land Registry (again) who checked the dimensions of the covered and uncovered areas.

    Surely one inspection covering all these matters would be sufficient?

  • Martyn says:

    “The Federation of the Building Contractors Associations of Cyprus (OSEOK) announced last Friday that turnover is declining, contracting companies are terminating or suspending their operations and that unemployment in the sector is increasing dramatically. It expressed its concerns that if no immediate measures are taken to support the construction sector, the impact on the sector and the economy will be “tragic with dimensions that will have huge economic and social costs”.

    Well, well, well, it’s finally dawning on those at the ‘sharp’ end that the Golden Goose has, almost, stopped laying and, more worryingly, unlikely to resume production in the foreseeable future. And with everything else that is, or isn’t in the case of Government, going on, the downward slope looks increasingly slippery, Cyprus reputation falling fast, problems construction and legals wise piling up, international Credit Rating falling fast, talk even of a Euro bailout, Government virtually at a standstill, power cuts, water outages expected. Whatever Next?

    At least APOEL are still flying the Cyprus flag with pride!

  • Mike says:

    And still this administration bows to the pressure from developers and skips around the root cause of the issue and introduces pathetic attempts at further deceiving foreign buyers by way of so called possible amnesty for irregularities laws but never eliminates the need for developers, Land Registry, Banks, planners and lawyers to take collective responsibility for their colluding parts in this debacle in fear of upsetting them.

    As a consequence we get what we deserve as a Nation but sadly that also affects the general law abiding citizens too.

    Let us hope someone comes to their senses and realises what the actual problem is as against what they would like to believe the problem is and more importantly does something about it. I, for one, will not be holding my breath.

  • @John – thanks for your comments – a typing error on my part which I have now corrected. The 4,493 figure is for 2009.

    Sales in 2008 were indeed much stronger – 10,152. And in 2007, they were stronger still at 12,355. (Sales in 2011 are down by more than 66% on the numbers sold during the same period in 2007).

  • John says:

    Could you please check these figures as I believe the 4493 sales for the first 7 months actually relates to year 2009.

    The figures for the first seven months of 2008 I believe were actually much stronger at 10152 a considerably bigger decline than 7%

  • Jim says:

    Not unexpected & sales unlikely recover until the government (sorry we don’t have one at the moment, as they all resigned) take their heads out of the sand & do a root & branch overhaul of the property purchase laws, to ensure a clear title is available to a purchaser when he pays for his property.

  • Costas Apacket says:

    122 is still too many!

    Let’s hope that some of these properties had their Title Deeds available for transfer to the purchasers at the time of purchase or we may have some new members on here in the near future!

    So what are the unoccupied Planning Staff doing now there’s more time to issue Certificates of Final Completion and/or Title Deeds?

    Longer lunch breaks???

  • Robert Briggs says:

    As they have sown, so shall they reap!

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