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Property market shows encouraging signs

Property sales in Cyprus increased in May with the number of contracts deposited at Land Registries reaching their highest level since June 2010, raising expectations that a recovery may be underway.

FOLLOWING a period of decline lasting nearly two years, property sales in Cyprus during May staged a surprising recovery, although the reason for this is unclear.

During May, a total of 854 contracts for the purchase of property were deposited at Land Registry offices across the Island compared with 697 in May 2011; an increase of 22%.

A 22% increase may seem large at first sight. But when you consider that during May 2008 a total of 1,366 contracts were deposited, any recovery in the market still has a long way to go, but the signs are encouraging.

Of those 854 contracts, 222 (26%) were in favour of overseas buyers; 632 (74%) were in favour of Cypriot buyers.

But it is unclear why the number of sales has improved; there are a number of possible reasons:

  • There was a rush to beat the deadline to benefit from the reduction in Property Transfer Fees. (The deadline has now been extended to the end of the year).
  • May marks the start of the holiday and tourist season, when the property market tends to benefit from an increase in sales.
  • Given the precarious position of the banking system and the Island’s economy, some people may have chosen to invest in property rather than leaving their savings in the bank.

Domestic sales

With the exception of Limassol, where there was a slight decline (-1.5%) in the number of properties sold last month compared with May 2011, sales were up in all districts. Overall, a total of 632 contracts were deposited compared with the 510 deposited in May 2011; an increase of 24%.

Source: Department of Lands and Surveys

Overseas property sales

Sales in Paphos were particularly strong, increasing substantially (165%) compared with May last year.  Sales in Limassol also increased (by 21%).

However, sales were down in all the other districts. Famagusta fared the worst, with sales down 38% compared with last year. Sales in the capital Nicosia fell by 28% and in Larnaca they fell by 17%.

Overall, a total of 222 contracts were deposited in favour of overseas buyers compared with the 187 deposited in May 2011; an increase of 19%.

Source: Department of Lands and Surveys

Readers' comments

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  • e says:

    Hopefully the lull in deposits with DLOs will have given them time to process all the delayed title deeds they have been overwhelmed with over the past few years. Yeh Right!! Oh well hope springs eternal.

  • @marktyler – Unfortunately, there is no way of knowing what types of property were sold. The numbers above include:

    – Residential properties (houses & apartments).
    – Commercial properties (shops).
    – Offices
    – Warehouses
    – Land (building plots and fields)

    The Land Registry figures do not provide sufficient detail. (Pavlos Loizou’s ‘Project Red’ is analysing the Land Registry’s raw data – see Property transactions examined under microscope).

    The other article is concerned with the number of new homes being built, which are considerably lower showing there is little investment taking place.

  • marktyler says:

    We all believe in freedom of expression here, so I wonder how this squares with the adjacent story which cites ‘Cyprus New Homes Down 50%!!

    Which is the “leading indicator”? – new homes to be constructed/or sales of second-hand properties? I tend to guess the former is more likely the indicator for the future…so low numbers of new buildings planned point to weak confidence in the future market. Government coffers are close to empty already and talking about going to the EU with cap in hand for a bailout.

    I just hope the EU will get its pound of flesh in return.

  • John Swift says:

    Well a recovery will only be on the way regarding UK customers when the UK property market recovers.

    I personally think that the happy times will now be a thing of the past unless more realistic Cyprus property prices are set.

  • Ian says:

    I think that it will take more than 1 month to declare a ‘Trend’.

    Reserve the optimism for the months ahead, and review later in the year.

    I wonder if it will last !!

  • Mike says:

    I think Martyn may have a point here as my wife and I are agreed that if forced sales reach a level of discount that we value a property as (very much lower than current offerings) then we would have no objections at all in purchasing for the family and indeed ourselves. As long as title is freely available.

    Alternatively we continue with what we have it is certainly not a priority. Sadly those who paid the vastly inflated and unrealistic prices in the past may lose out but let’s hope not.

  • MARTYN says:

    A surprise but they do occur occasionally in all Statistical records. Visiting UK I do find the £s recent significant appreciation against the €, coupled with increasing numbers of distressed sales – at severely distressed prices, especially in Paphos – is starting to attract greater interest, as is the powerful and seeming successful marketing of the Limassol Marina properties.

    But then 222 overseas sales against 1366 in May, just 4 years ago, gives a much better perspective on just how low things have got. No real cause for cheer then really, especially as old habits in the property related ‘professions’ still seem far too well ingrained!

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