- Cyprus Property News Magazine - http://www.news.cyprus-property-buyers.com -

Many properties will remain unsold

ANALYSING the present situation in the property market to ratings agencies Moody’s and Fitch the lead consultant of Leaf Research, Pavlos Loizou, explained the explosive situation that has been created after years of speculative overbuilding.

Large numbers of properties remain unsold and the market is oversupplied. Many properties were holiday homes built for “buy-to-flip” investors and are unsuitable for permanent living. Now that the period of frenzied investment speculation has come to an end, these properties are unlikely to be sold in the near future.

Very little construction activity is taking place as the banks have tightened their borrowing criteria and are withholding finance for almost all projects. However, there is a demand for city centre apartments, some holiday homes, student housing and projects related to renewable energy.

This situation adds to the reputation created by Cyprus abroad as an unsafe place to buy a holiday home or even permanent home, unless its Title Deed has been issued and is readily available.

Mr Loizou referred to the bank’s exposure due to the fact that property is used as the main collateral to raise finance. He noted that takes a bank 9 to 12 years get control over a mortgaged property – and even then, it is unlikely that it can be sold if it is the defaulter’s main residence.

Summing up the situation on the state of the market and where it is heading, Mr Loizou said that: