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No end in sight to the collapse in property sales

With the exception of January, when sales improved compared with January 2011, property sales in Cyprus have been shrinking for the past 22 months with no signs of a recovery in the foreseeable future.

THE collapse in property sales is continuing despite price cuts and government legislation introduced last year designed to provide additional protection to consumers.

With unemployment spiralling out of control and the tightening of lending criteria by the banks, very few people have access to the funds required to purchase a property.

The general uncertainty in the Island’s economic future is also depressing local demand.

The banks are in a pitiful state and the government has said that it is ready and willing to bail them out should it become necessary. Such a move could place such an unbearable strain on the government’s resources that it may have to apply to the European Financial Stability Facility (EFSF) for a loan.

The collapse in sales also reduces taxes flowing into the government’s coffers. According to calculations carried out by the director of the Land Registry, Andreas Christodoulou, state revenues will be lower by 25%-30%. “Lower Land Registry Revenues will affect the general state revenues in 2012 as well”, he said.

During April, a total of 461 contracts for the purchase of property were deposited at Land Registry offices across the Island compared with 542 in April 2011; a fall of nearly 15% – and a drop of more than 70% on the 1,556 contracts deposited in April during the boom year of 2007.

Of the 461 contracts deposited in April, 119 (26%) were in favour of overseas buyers.

Domestic sales

With the exception of Paphos, where there was a slight increase in the number of properties sold last month compared with April 2011, sales were down in all districts. Overall, a total of 342 contracts were deposited compared with the 391 deposited in April 2011; a fall of 13%.

Source: Department of Lands and Surveys

Overseas property sales

With the exception of Limassol, where there was a slight increase in the number of properties sold last month compared with April 2011, sales were down in all districts. Overall, a total of 119 contracts were deposited compared with the 151 deposited in April 2011; a fall of 21%.

The government still has much to do to repair the Island’s tarnished reputation abroad resulting from the on-going delays in issuing Title Deeds and the actions of unscrupulous property developers.

Source: Department of Lands and Surveys

Readers' comments

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  • steve says:

    The Emporiki bank advising all customers 5+ yrs ago to effect a swiss franc loan as its the most secure………..thanks to that advice I now owe more than the value of the property and I bought 8yrs ago…it’s a total disaster and I’m sure there are many like me who are now considering throwing back the keys and walking away with nothing. Sad but very true.

  • Adrian says:

    Gavin is right, Title Deeds should be handed over with your final stage payment but knowing Cypriot developers and the local authority who have to issue them there would be some excuse that they were delayed, by that time you have paid for your house!!

    You could get your lawyer to take them to court and then you are back into the old corrupt system. It all starts at the government level and they are not worried because the next gravy boat is already being divided up with the gas and oil revenue.

  • Martyn says:

    i brought an apartment in paphos 2005 and have regretted it ever since,scam after scam and a property lose of 50% value.
    when will the cips wake up to the mess there corrupt government, police ,solicitors, bankers, builders,etc have caused.
    any one thinking of buying in cyprus should think twice ,three times and more.

  • Andrew says:

    There is a global collapse in property sales and this will compound the problem in Cyprus. Sadly Cyprus appears to beleive that they can muddle by with their antiquated property laws and lack of proper, scheduled building control.

    For some reason they seem to think that putting one sticking plaster over another is the way forward.

    Listen to what home buyers want and things can improve. When someone buys a new home in good faith it is only reasonable to expect that the build quality would meet basic European standards of insulation, damp proofing and drainage.

    More importantly every home should be issued with Title Deeds immediately. No home should be subject to repossession because of unpaid Developer Mortgage

  • douglas says:

    It seems to me that these incompetent governments in the European Union never learn or will ever learn from their mistakes or other countries mistakes, such as Spain, that country ripped off British, German and Dutch house investors and now they are paying for it. The old saying is what goes around comes around and I don’t feel sorry for the plight this country finds itself in. If the Cyprus government doesn’t get its house in order and issue property owners with their deeds promptly they could find themselves going down the same hole as Spain where no one wants to invest in country. I for would like to invest in that country but became scared because the complaints of the absurd time you have to wait for your deeds.

  • sam london says:

    Once the Greeks are forced to leave the Euro then Cyprus will not be able to compete for the tourist industry as it will be too expensive unless it also leaves. as regards overseas investors Cyprus has now got the reputation internationally as a basket case like Greece with a corrupt property market.

    I believe that Cyprus is in for many hard years ahead in tourism and the property market. the value for money compared to other countries is not there any more and having visited the country last year I was shocked by the poor holiday accommodation and the prices of food and drink. Also a very vocal campaign is now being waged in the UK by expats who have been shafted by Cyprus banks and from my many contacts this appears to be completely turning people off Cyprus and its corrupt property market.

  • Fred says:

    Gavin is correct, as is Anon. We bought in Jan 2008. half of the apartments on our complex were left unsold. Only in the last three months have any more been sold & they have gone at about half of the price we paid. The word is out but the Cypriots are still under the delusion that no one knows about the systematic corruption, atrocious quality levels & rip off mentality which are now the foundations of the Cyprus property industry.

  • Ian says:

    @Gavin. Couldn’t have put it any better. Spot On

  • Anon says:

    Funny how we don’t see the property prices advertised on websites drop – they still seem to be trying their luck at higher prices! If their prices were advertised at true market prices international investors will follow…

  • Nick - Larnaca, Cyprus says:

    It may take a Greek-type economic implosion to finally get the message across that Cyprus could be drinking in the ‘last chance taverna ‘ if it doesn’t heed the warning signs writ large on the walls of the unsold and unfinished properties scattered around this beautiful island.

    There is a tremendous fund of goodwill that wants Cyprus to succeed and prosper – yet the greedy, self-interested idiots in positions of responsibility who think they know it all will take not a blind bit of notice. For that reason alone their personal demise is all the more deserving.

    There will undoubtedly be further pain before the economic fever subsides and the patient is given the opportunity to recover. When that happens those responsible for the maladministration and misdirection of affairs will hopefully have been drummed out of the brownies.

    The only consolation is that if you look to other countries, including the UK, you will find the same individual and corporate character traits at work.

  • marktyler says:

    The trend makes sense; why buy a property, priced expensively in Euros, in Cyprus, when the Euro might soon be the currency of only a higher-worth select group, sooner or later? Cyprus will reap the bitter harvest. Cyprus identifies closely with Greece, its investments in Greece will turn pear-shaped commensurately, and likewise be forced back to its own devalued former currency. So why buy property right now?

  • Gavin Jones says:

    Any business or institution thrives and prospers when it nurtures trust.

    Remember Gerald Ratner’s classic throwaway admission that his nationwide jewellery business sold “crap”? The result was financial meltdown and the demise of his company.

    Cyprus PLC once had ‘trust’ and possessed quality in bucketfuls in almost all sectors of its economy. It too now has a ‘crap’ product – and certainly when it comes to real estate. This has come to pass as a result of the total lack of trust of potential buyers in the real estate buying process, let alone the finished product.

    No amount of extension of town planning amnesties and other such wheezes will make a fig of difference. The following will: issuance of title deeds to those who’ve already purchased real estate and the same to apply ongoing. Anything less will not suffice.

    NO title deeds, no more sales. End of construction industry. End of story.

  • Robert Briggs says:

    Apart from the economic downturn, I am afraid that the “local powers that be” are reaping what they have sown. So first step in the right direction, property laws to be based on a decent legal footing, as in all cases Title Deeds to be available at point of sale / exchange of contracts. R.B.

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