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Overseas property sales hopes helped by Chinese

The Cyprus overseas property market is reported to be getting a boost from the Far East as interest from Chinese buyers looking to purchase top end luxury properties in Paphos is increasing.

CHINESE buyers are helping to rejuvenate the stagnant property market in Paphos where sales have risen by 25 per cent in recent months, industry professionals say.

The once booming Paphos property market, once dominated by British buyers, collapsed in 2009 as a result of both the worldwide recession and the title deeds scandal in which buyers who had paid in full for their properties were left years later without possession of ownership documents.

The collapse has had a serious knock on effect on the local economy which had long relied on tourism and property sales as an economic mainstay.

“There has been a 25 per cent increase in Paphos sales according to recent official statistics and part of this increase is due to the Chinese purchasers,” said George Leptos of the Paphos-based developers the Leptos Group and head of the Paphos Chamber of Commerce (EVE).

Billboards along the main roads of Paphos are now advertising properties for sale in Chinese while developers have been actively targeting the Chinese market for some time.

Their perseverance appears to have paid off.

“We have various offices in China and we regularly attend various property exhibitions. All of our sales in recent months have been to Chinese clients,” said Sophia Charalambous of Korantina Homes.

She said Chinese clients are keeping the company busy, and are choosing to purchase top end luxury properties.

“We have many Chinese clients, mostly business people and families. Most of our clients have a budget of around €1,000,000,” she said.

“The British market has almost dried up for us. We have the occasional Russian client but we are mainly working with the Chinese. Next week 12 prospective buyers are arriving and we will see how many make purchases.”

The property professional added that even though China was a ‘new’ market, it wasn’t a ‘phenomenon’ as such, as investors from China should be expected in Cyprus.

“China has a large population and has a rich economy. It’s doing better than a lot of other countries,” she said.

House sales in Paphos are just one example of the stronger economic links between Cyprus and China. The Chinese company, Far Eastern Phoenix, is eager to lease the old Larnaca airport from the government to turn it into an exhibition space. On Friday Communication and Works Minister Efthymios Flourentzou said an oral agreement had been reached over terms, but a written agreement was still needed. China was also one of the countries approached to provide a loan to the government before it was forced to go the EU for a bailout in June.

Charalambous said that most of the developers in Paphos are dealing with the Chinese market and that the definite upward trend in Paphos property sales was due to the Chinese.

George Leptos was equally optimistic.

“Generally there are good prospects regarding this market and it should be explored further,” he said.

The Leptos Group has participated in exhibitions, generated Chinese business contacts and undertaken product promotion in China.

Leptos said that the company’s Chinese clients are interested in ready or almost ready properties, of a value ranging from €300,000 to €800,000.

As non-European nationals, prospective Chinese buyers need to make a minimum property purchase of €300,000, and prove they are of an adequate financial status to stay in Cyprus.

“The Chinese as well all other non-European property buyers are entitled to apply for and receive a permanent residency permit for themselves and their family, providing that they fulfil certain pre-specified standard conditions,” said Leptos.

“Once the permit is obtained, they can reside in Cyprus for as long as they own the property. They become what I would call ‘permanent tourists’.”

While Chinese buyers are apparently boosting sales in a depressed market, Pavlos Loizou, board member of RICS Cyprus (the Royal Institution of Chartered Surveyors) said that the latest figures were far less impressive when put into context.

“Whilst it is correct to say that there has been an increase in property sales in Paphos since 2010, very few transactions actually occur every month and so when these figures are turned into percentages terms the increase appears greater than it actually is.”

While Loizou said he couldn’t specify if Chinese buyers were purchasing properties in Paphos, he noted that in March only 90 properties were sold in Paphos, 36 of them to foreign buyers. In April the figure dropped to 84, 36 of them to foreign purchasers. In May, sales reached 165, 82 of them to non Cypriots.

“Paphos was the first town to experience a fall in sales as well as the largest decrease in sales, but it is beginning to stabilise, whilst other towns are still falling. You could say that Paphos hit the bottom first.”

Paphos has been most affected by the property slump in Cyprus because it had a far greater reliance on foreign purchasers and now has the highest number of completed units which remain unsold.

The Title Deed fiascoBut the decline in sales was also due to the title deeds fiasco. Commonly in Cyprus, developers take out mortgages on land or property, the liability for which may then be placed on the purchaser of a property on that development, if the developer or landowner becomes bankrupt. It also meant title deeds were held by the bank who granted the mortgage.

After years of outcry by misled owners, in 2011 the government introduced a ‘specific performance law‘ which grants a contract of sale precedence over any pre-existing mortgage (providing that the buyer pays the mortgage lender the amount of the mortgaged debt attributable to the property they are purchasing).

Purchase a property with a Title Deed

Even so, buyers should still purchase a property with a title deed (and use the services of a competent & independent lawyer to check everything is OK and to draw up a watertight contract – and ensure the title is ‘clean’; i.e. free of any mortgages and other claims) to ensure a buyer is protected from the numerous pitfalls; this will also enable the resale of the property without encountering any problems over ownership.

However, according to Korantina Homes, their Chinese clients are purchasing a mixture of properties, some off plan, some with title deeds and some where the deeds are “almost ready”.

Property sales in Cyprus boosted by Chinese

Readers' comments

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  • Costas Apacket says:

    Surely there must be some inter High Commission meetings or forums between the various High Commissions in Cyprus where they could share this information about the many pitfalls of buying property in Cyprus.

    Then like the BHC the other National High Commissions could choose to warn their own Nationals about this situation and even share the list of reputable providers of Legal Services?

  • MRing says:

    Could this possibly mean Cyprus is about to see the launch of its first decent Chinese restaurant?

  • John Swift says:

    As UBoat says will they be unsuspecting as many UK ex-pats were in the past.
    On one of the popular Cyprus forums the subject of title deeds was made taboo by the forum owner with the comment “Not that old chestnut again”, I believe this person had a relative in the building trade.

  • Costas Apacket says:

    We’re still descending further into the abyss whilst Catastrofias and don’t call me Shiarly prattle on about ‘softer options’ instead of the painful but absolutely necessary and inevitable austerity measures being proposed by the evil Troikladites.

    More twists and turns are inevitable in the ‘artful republic’ where social cohesion stands for always taking the easy way out, which is exactly what has led to the lack of any robust legislation which would properly control the property market for the benefit of consumers, may they be from Cyprus, Timbuktoo or China.

  • Gavin Jones says:

    It’s very clear to me what we’re witnessing:

    Gotterdammerung.

    For those of you not too up on German literature, it’s the final battle between the Teutonic pantheon and the forces of evil.

    This word was also used to describe the Battle of Berlin in 1945 and the destruction of the Third Reich.

    In his manic delusion, Hitler believed that an army under General Wenck would come to Berlin’s aid and save the day. Pure fantasy as the army didn’t exist: the same belief exists that the Chinese will ride to the relief of the Cypriot property market.

    It wouldn’t exactly be too difficult to substitute the players and transfer them to a Cypriot interpretation of gotterdammerung;

    The troika and the government. Good and evil? I couldn’t possibly comment but I know who’s going to prevail.

  • Denton Mackrell says:

    @U-Boat. I assume by the ‘real state of affairs’ you also meant the ‘real estate affair’ i.e. the mega scandal. Or should it be ‘the real affairs of state’ meaning the government will go down with the ship singing the Internationale rather than admit they have failed the country so miserably and that AKELite communist dogma does not work in the real world?

  • Peter says:

    Guaranteed the Chinese will get ripped off the same as everybody else, only probably more so …

  • UBoat says:

    I do hope these poor unsuspecting Chinese buyers are being warned about the real state of affairs in Cyprus

    regards

    UBoat

  • Mike says:

    Remember the immortal words along the lines of – There are lies, there are damned lies and then there are statistics.

    25% of 4 is 1 as andyP alluded to.

    When in quicksand, stop struggling and quietly but quickly think of the one guaranteed way that would get you out of the mire. It’s not rocket science unless you are deceiving and lying to everyone in which case you either admit it or die.

  • Denton Mackrell says:

    Aw, this is peanuts! Cyprus will be launching its first space rocket soon but not before it has won 20 gold medals at the Olympics and seen that Disney Theme Park opening in Pyla, the hotel and leisure complex in Oroklini, the 5 star Qatari hotel in Nicosia and……. Hey, look, up there in the sky, it’s a flock of flying moufflons.

    If Cyprus had implemented an ounce of fiscal and banking discipline for every tonne of fantasy and bullshit it has emitted in the past 5 years, it would not need the Troika here.

  • Costas Apacket says:

    ‘However, according to Korantina Homes, their Chinese clients are purchasing a mixture of properties, some off plan, some with title deeds and some where the deeds are “almost ready”.’

    For ‘off plan’ or ‘almost ready’ read ‘up to 15 years wait’ until the Title Deeds are finally extracted, kicking and screaming, from the totally inefficient Cypriot property transaction system.

  • andyp says:

    Jim. 25% of not a lot is still not a lot. Pure spin as usual.

  • Mr Holland says:

    Odd Job and Jim

    With sales figures so low it will be easy to see 25% rises and may be 50% rises in sales.

    Cyprus has moved away from relying solely on the moaning Brits and have attracted much interst from Russia, Scandanavia and now China

    These new markets , with Russia already making great use of what is available on the Island these past 10 years, will help to kick start a new breed of investor and traveller.

    Watch and learn and retire in peace…preferablt back in the UK…IT SUITS YOU BOTH

  • Andrew says:

    Title Deeds “almost ready” “permanent tourists” . Whatever next? I would laugh but they are probably serious.

  • Jim says:

    I do not see a 25% increase in Paphos sales.

    I do see this article as a desperate measure by cash strapped developers, who are trying to talk up the market. They know their survival is at risk, when the Troika insist the banks show their loans as non performing, & take action to liquidate.

    Here are the latest property numbers as listed on Nigel’s site – Real estate sales falter in June

  • Odd_Job_Bob says:

    不這樣做!!!!

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