Cypriot real estate sales in freefall

DEPARTMENT of Lands and Surveys published yesterday show that the number of contracts for the sale of property deposited at Land Registries throughout Cyprus in September fell for the fifteenth consecutive month.

Last month’s hope that the decline in sales may be slowing were dashed as sales fell by 11.5% last month with the number of contracts deposited reaching 608 compared with the 687 deposited in September 2010.

Famagusta performed well, with sales during September up 43.1%. Limassol also saw an increase, with the number of sales rising by 7.5%. But sales in Nicosia, the capital, fell by 41.1%, while those in Larnaca fell by 10.1% and those in Paphos fell by 8.0%.

Total sales during the first nine months of this year stand at 5,317, a decline of 17.5% on the 6,446 sold in the first nine months last year. Sales are now down by nearly 10% on those of 2009; the year the market collapsed.

So far this year, Limassol is weathering the storm well with sales by just 0.8% below those of last year. But in Larnaca sales have fallen by 27.5%, in Nicosia they are down 23.7%, in Paphos they are down 22.5% and sales in Famagusta have fallen by 15.9%.

Overseas sales

Overseas property sales, which account for a quarter of all sales, fell by 37.2% last month with the number of contracts deposited reaching 113 compared with 180 deposited in September 2010.

Although sales during September went up in Famagusta by a startling 150.0%, they fell in all other districts. Sales in Nicosia fell 67.6%, while those in Limassol fell 51.5% followed by Larnaca, where sales fell 47.1% and finally Paphos, where sales were down 42.2%.

Total overseas sales during the first nine months of the year totalled 1,310; a fall of 6.6% on the 1,402 sold in the first nine months of last year.

Comment/opinion

The problems in the domestic market are due to the economic uncertainty, the lack of liquidity and high interest rates. Also, unemployment levels are at an unprecedented high, having more than doubled over the past thirty months.

Overseas sales have been hit by the global downturn and the well-publicised problems associated with buying property on the Island.

Many of the properties built in the past for the overseas market were specifically targeted at British buyers. However, according to their report “Spotlight on Second Homes Abroad” published last month, Savills Research said that:

“Buyers favour more spacious units, in line with traditional overseas property buying trends. This reflects that today’s buyers are motivated by lifestyle reasons rather than simply the opportunity for financial returns” and that the proximity of cultural/historical attractions are important factors when choosing a holiday home overseas.

What do holiday home buyers look for?

According to Savills Research “Preference for low density environments and good accessibility, proximity to beaches, and the opportunity to sample local cuisine and culture, are all factors influencing choice of holiday home destination. Almost 60% of holiday home owners prefer quiet rural and village environments to urban areas.”