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Property sales in Cyprus plummet to lowest on record

The number of properties sold in Cyprus during 2011 fell to their lowest level since records began according to the figures published earlier today by the Department of Land and Surveys.

FIGURES released by the Department of Land and Surveys earlier today reveal that the number of property sale contracts deposited at Land Registries last year fell to their lowest since the Department started publishing figures in 2000.

Domestic demand is being depressed by uncertainty in the market, record levels of unemployment and a lack of liquidity.

Speaking to Stockwatch, property valuer Polys Kourousides said that it is difficult to predict recovery. “The lack of liquidity and the fear for investments cannot change things”, he said.

“We do not expect recovery in 2012 although there are good opportunities in the market”, he stressed.

According to the figures the number of sale contracts deposited in 2011 fell to 7,018; a drop of 18% on the 8,598 deposited during 2010. Sales to overseas buyers accounted for just under a quarter of all properties sold.

Source: Department of Lands and Surveys

Speaking to OPP last week after the publication of the overseas sales figures, Yiannis Misirlis of Limassol-based Imperio Properties, said “2011 has been a bad year for the property market in Cyprus. Despite the upward trends in the first half of the year, the year ended with a big decline of the overall sales. The East (Ayia Napa, Larnaca) and the West (Paphos) of the island seem to be the areas most affected, although the same signs start to appear in Limassol and Nicosia (traditionally the best performing areas) too.

The foreign investments seem to be more ‘reserved’ too. A large part of our buyer community continues to come from Russia, and a smaller part from Asia and the Arab world. The Arab Spring seems to be helping a bit. And people seem to be more selective in terms of quality and prime location. The latter (prime location) seems to be able to attract a premium again. I see the same trend for 2012 … quality will trump price.”

Source: Department of Lands and Surveys

Ioannis Verdelis, a consultant with Best International, believes that perception and confidence lie at the heart of the difficulties in Cyprus.

“Few markets have done more to hurt investor confidence than Cyprus has,” he told OPP last week. “The ongoing North Cyprus political situation has always been in buyers thinking, but for years buyers in the South at least knew they enjoyed the protection of a developed European country.”

“However, story after story has broken to the press with developments stalling, title deeds not existing, and of course recently banks foreclosing properties in situations where a developer defaulted and had not registered titles for existing buyers.”

Verdelis would like to see a more pro-active fight-back from the authorities to address these perception problems.

“The Cyprus market has a lot going for it,” he told OPP, “but it takes time to educate people.  To bring investor confidence back would require bold steps from the local authorities to resolve the ongoing title problems. A lot of steps have been taken to this direction already, but I think it will take bold moves to get the attention of the media and buyers again.”

Update 10th January

Listen to an interview between myself and Nathan Morley on CyBC Radio 2 earlier this evening.

Readers' comments

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  • Richard says:

    @andyp – you will never stop the unscrupulous. The good news is though – even in the ‘great firewall of China’ – people do get on the internet.

    How do you think Cyprus looks these days on the web?

    The Chinese are tougher buyers than Brits – and won’t take the daft nonsense we have.

  • andyp says:

    I think it is quite clear that a catastrophic event hitting the property industry will be required before any material change is affected by Government. Sadly this will affect everyone including myself but we are not quite there yet so I believe there is a further drop in the market still to come.

    How do I know this? Well by complete chance I stumbled across my favourite and most trustworthy ex Advocate (wee joke) appearing in the papers in China who were reporting on a property roadshow and the benefits of buying in Cyprus.

    These crooks, and this is not a generalisation, will never stop unless they are forced to change. They will just seek out more victims.

  • @Denton – who was it said there are “lies, damned lies, and statistics.” :-)

    I understand from conversations I’ve had that Russians are looking further afield these days. In fact, a young Russian couple bought a house next to friends of mine in Erimi and another Russian couple looked at a house of some friends in Paphos.

  • Denton Mackrell says:

    Mr Misirlis states that ‘a large part of our buyer community continues to come from Russia’. This probably relates to his own property company’s customer base rather than the Cyprus property market overall.

    The relativity issue also needs to be born in mind. Some particular developers 2-3 years ago may have had 20-30% of their customers from Russia (because they targetted that market) and the rest native Cypriots. They probably now find that the Russian proportion has risen dramatically, not because the number of Russian customers has risen but because the number of Cypriot customers has dried up, thus skewing the data. This also relates to the other article posted today on Russian buyers in Limassol.

  • andyp says:

    Likewise I see no cause for optimism. The warnings about buying Cyprus property without a title are now out there and only The Government of Cyprus can sort the problem.

    Similarly the warnings about unscrupulous Developers,Bankers and Lawyers are now out there too.

    These are the primary factors which have plunged this property market so drastically, not the general economic climate.

    We all know it as does the Cyprus Government but thanks to the internet everyone else does too.

    Establishing a liquid, secure, and transparent property market will have so many immediate benefits I simply do not understand why they do not fix the problem quickly rather than tinkering around the edges and waiting on oil and gas receipts which may never come. Yes I know This is Cyprus.

  • Denton Mackrell says:

    @Martyn. You are correct but don’t expect anyone here in any senior position to know what ‘strategic analysis’ and ‘SWOT’ mean! What, when a large well known developer asked me quite candidly what ‘project management’ means!!?? Remember, all these self-styled big shots and staff, whether developers, lawyers, agents or public servants, are poorly qualified and only got their jobs through nepotism, rusfeti and other corrupt routes.

    Halcyon days are over? A well known Cypriot businessman who made it big in UK and has extensive property experience told me to expect it to take 20-40 years for the Cyprus market to (possibly) recover. He personally avoided the Cyprus market. I wonder why.

  • jon frazer says:

    Nigel, I look forward to hearing you talking about this topic on the radio tonight.

  • Martyn says:

    After compiling my earlier Comments I noticed the following telling sequence

    RELATED NEWS ARTICLES
    Overseas property sales in 2011 lowest for ten years
    Investments in Cyprus construction continue to fall
    Forty thousand non-Cypriots caught in Title Deed trap
    Property prices under pressure
    Slump in property sales to overseas buyers deepens

    PS: (I’m left-handed and read ‘upside-down’. = bottom-to-top)!!

  • Martyn says:

    Gavin Jones captures, below, the key points admirably; I personally can see NO causes for optimism amongst the 3 ‘contributors’ and their contributions to the article.

    As has been said the entire Government – Developer – Legal Services spectrum with each’s associated sub-segments, needs to do a thorough Strategic Analysis including a brutally honest SWOT analysis, of the entire Cyprus property markets, processes, regulatory aspects – and then agree practical remedial strategies. I am talking about radical, far-reaching Reform.

    Can they do it? NO, not a snowballs chance in Hell if they try to to do this it ‘internally’. We’re talking here about the need for of a brutal holistic Disaster/ Turnaround effort of Superhuman proportions.

    Unless the ‘powers that prevail’ demonstrate a willingness for a radical change of view, strategies and actions on the entire ‘Property and Property Services spectrum’ AND allow significant and appropriate External inputs then I sense, now strongly, that Cyprus, as is, will simply re-focus on the next Big Boom – and if then the Med Gas opportunities in due course get squandered, as is quite likely, where will the Cyprus economy and lifestyles be then?

    As Gavin says ‘the Halcyon Days may Never return’!

  • DC says:

    The main problem here is simple – TITLE DEEDS! There will always be people with ‘the dream’

    No matter what – but they don’t want a nightmare!

  • @John Swift – my neighbour, who is Cypriot, had his house built in 2003 (the same as me). Within a couple of weeks one of his bathrooms was underwater due to faulty plumbing.

    But that was the least of his problems. Just a couple of months ago he had the house re-roofed; it leaked badly and his ceilings had turned black with mould and this had affected his son’s health.

    The contractor had to strip off all the old roof tiles (which had been cemented to the concrete roof) repair the roof itself, fit a roof membrane, fix battens and then the roof tiles. It cost him a fortune.

  • Greg Gregory says:

    Re arrange the 3 words below to best describe the state of Cyprus property market in summary to this article. Answers on a stamped addressed envelope. The lucky winner will win an empty packet of crisps.

    ARE STUFFED THEY

  • John Swift says:

    One issue that doesn’t seem to be addressed is the poor quality of construction in many new builds.

    The 14 month old house that we rented had several faults but the fault that cost quite a lot of money to rectify was with the internal plumbing (drainage) which leaked through the internal walls in several places.

    Ours and the two adjoining properties built by the same developer, using imported Syrian labour, are quite frankly a disaster, one was already tilting and the other 70% completed looks disgusting as the outer cosmetic work is not yet in place.

    The house that we rented in 1966/7 is still there today with no problems.

  • Whirlybird Rtd says:

    Ioannis Verdelis, the consultant with Best International is a very tactful gentleman in the way he has expressed his report ie.(“The Cyprus market has a lot going for it,” he told OPP, “but it takes time to educate people. To bring investor confidence back would require bold steps from the local authorities to resolve the ongoing title problems. A lot of steps have been taken to this direction already, but I think it will take bold moves to get the attention of the media and buyers again.”)

    I take it to mean that it is the government who need to be educated first on the financial needs of this great Island, then pass it on to local government. The past, present and future governments will only reap what they sow, if the past and the present governments are anything to go by “God Help Cyprus” and its residents.

  • Costas Apacket says:

    I’ve just had Viviane on the phone from Brussels.

    She was livid, spitting feathers, and very upset that Pres Tof and his team have not had the courtesy to reply to her yet, despite that we’re now into Mid January.

    I said to her, Viviane, Viviane, calm down dear, this is after all Cyprus and early January, when translated into Greek, really means anytime up to the end of March.

    When will she ever learn?

    Siga-Siga.

    (Just for the sanctimonious amongst us, this is intended a bit of light relief and should not be taken factually!)

  • @Gavin – If I wasn’t an optimist, I’d be a drunken wreck by now.

    Questions are being asked by the EU and the government here must realise that it has to change ‘the system’.

    Hopefully this will come about sooner rather than later as the present situation is untenable. Will future changes affect those who have already bought and are waiting for their deeds? If it doesn’t, the property market here will never recover.

    It is clear from the dwindling number of sales that the changes in the law made earlier this year have had zero impact – and looking at the this years figures, the situation worsened after the changes were implemented.

  • Gavin Jones says:

    Polis Kourousides.
    Yiannis Misirlis.
    Ioannis Verdelis.

    My comments are directed to you three as it is primarily up to you and your colleagues in the different disciplines of the property business to change tack and arrest the catastrophic downward trend in real estate purchases, and especially in the expatriate market.

    Let me firstly explain my motives and thoughts.

    Because of a lifetime’s association with Cyprus, I am appalled at the ongoing behaviour of all concerned when it comes to the title deeds scandal. In essence, I feel that everyone connected with your business, as well as central government, are guilty directly or indirectly in the title deed scandal; this is either by direct involvement or condoning fraudulent/negligent behaviour because it’s easier to say nothing as the perpetrators of these frauds provide you all with work, and hence fees or commissions.

    Furthermore, out of the three of you, only Mr. Verdelis broaches the subject of title deeds. He writes, “To bring investor confidence back would require bold steps…to resolve the ongoing title problems”. Unfortunately, Mr. Verdelis reverts to standard head in the sand mode by downplaying the severity of the situation when he continues, “A lot of steps have been taken to (sic) this direction already…” Really? And what ‘steps’ are they, Mr. Verdelis? Are the 40,000+ expatriates about to be issued with their title deeds anytime soon?

    This reality also makes a mockery of Mr. Verdelis’ assertion that “buyers in the South (of Cyprus) at least knew they enjoyed the protection of a developed European country.” I dare Mr. Verdelis to personally address this remark to each and every one of the 40,000+ I’ve mentioned above.

    Finally, it’s high time that you all took a long, hard look at yourselves and ceased living in cloud cuckoo land because your property ‘industry’ is dead in the water. Although the economic downturn has been a major factor in depressing sales, the inherent corruption, wishful thinking and failure to address the root cause of the title deed outrage have all been instrumental in shattering confidence. The figures published above prove you’re living on scraps and will continue to do so, however much you try to talk up the market.

    Cyprus has brought this upon itself and I doubt whether the halcyon days will ever return.

    Nigel.

    I always admire and respect your optimism.

    However, I have a rather more sanguine opinion on Mr. Verdelis’ and others’ use of phrases such as “bold moves”. Actions speak louder than words and we’ve heard nothing but the latter from all those connected to the Cypriot property market.
    Finally, I refer to the first sentence of your last paragraph. I take it that IF and WHEN title deeds were to be issued on completion, this would NOT apply retrospectively to the 40,000+.

  • @jon frazer – Two changes in the legislation last year:

    A new ‘Sale of Immovable Property (Specific Performance) Law’, N81(I)/2011, which provides future buyers with a degree of added protection and enables existing buyers without Title Deeds to assign their rights under the contract to a third party (thereby avoiding the ‘contract cancellation fee scam’).

    The ‘Town Planning Amnesty’ enabling some planning infringements to be legitimized so Certificates of Final Completion may be issued, which are necessary to enable the Land Registry to issue Title Deeds.

    It’s a start – hopefully the government will look at how the Land Registry can issue Title Deeds on delivery of a property as Land Registries do in other countries. If it can do that, all the Title Deed related problems will disappear overnight. (Perhaps this is what Mr Verdelis means when he talks about “bold moves”).

  • jon frazer says:

    Mr Verdelis ends his comments with the remark..” a lot of steps have been taken to this direction already”…(i.e. to address the problems in the Cyprus property market).

    I’d like to know exactly what these steps are!

  • Robert Briggs says:

    At least in this report, these agents have acknowledged there is a Title Deed problem. However from their track record, expecting the Cypriot “Authorities” to take effective remedial action, you will be waiting until Kingdom Come.

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