DURING the height of Cyprus real estate boom in 2007 overseas buyers purchased more than 11,000 properties on the island, accounting for more than half of all the properties sold that year.
But the collapse of the market in 2008 left the once popular tourist hot spots littered with thousands of unsold and unfinished holiday homes, many of which were targeted at British investors and which are unsuitable for permanent living.
Some of these will not be sold for many years as they suffer from poor build quality and will deteriorate rapidly or they have legal and other problems preventing their sale, such as the lack of a ‘promised’ golf course and other facilities promoted in their sales brochures.
The reasons for the collapse are well known. The financial turmoil that engulfed the world coupled with the nefarious practices of property developers, lawyers and bankers, the lack of Title Deeds, inadequate laws that left buyers with little or no protection and an ineffective system of justice all combined to stop the market dead in its tracks.
A number of UK-based companies jumped on the property gravy train acting as estate agents, investment specialists and exacerbated the many problems. Others wanting a slice of the action set themselves up as property developers, often leaving disasters in their wake after fleeing the island.
It didn’t take long for Cyprus good name to be dragged through the mud. Disaster stories started to appear in the UK media and investigative TV and newspaper journalists visited the island to find out for themselves the level of deceit and corruption in the property industry. As a consequence of the bad publicity these reports generated, Brits with money started looking at safer places to invest, turning their backs on Cyprus.
The Cyprus Property Action Group (CPAG) have been very effective in raising awareness of the problems with the British public and the European Union. Some changes to the law were implemented in 2011 to help improve consumer protection. But further changes are necessary to restore investor confidence.
Property developers are now tapping into new markets as witnessed by the increased number of sales in November and December. However the total number of properties sold to overseas buyers throughout the whole of last year (1,475) was the lowest for more than a decade.
Buyers from as far away as China are now being ‘encouraged’ to buy property on the island. But it will not be very long before they too turn their backs on Cyprus.
We have already heard from two independent sources that a number of Chinese buyers have complained of being cheated by at least two developers operating in the Paphos area. Will they never learn?
Paul, you do well to remind us there are plenty of dishonest people, so-called ‘professional’ people in countries other than Cyprus, and that includes the UK. It’s just that Cyprus happened to provide a relatively ‘soft’ backdrop – and a rapidly expanding economy, for them – against which to ply their nefarious tricks and trades.
As for change, it takes an age it seems for victims to seek and get any compensation, retribution, whatever – and sadly the old adage ‘people and countries get the governments they deserve’ again comes to mind. The Troika will do what it can but I can’t see any prospect of a really strong, reforming government emerging in Cyprus next month, or in the foreseeable future. And again, very sadly, the EU will find they have bigger fish to fry than little Ol’ Cyprus. The Big mistake here was of course Joining not the EU but the Euro, locked in and with little or no room to manoeuvre when the going got tough.
I no longer expect any Cypriot bank, developer, lawyer or agent connected with the property market to behave in the same way as ‘normal’ human beings. Unfortunately those type of people inhabit just about every country and seem to live in a completely different world to the rest of us. I would not be in the position I am now if it wasn’t for a greed ridden dishonest financial adviser in the UK . Ultimately they will have made their quick buck out of the rest of us and will smugly look back at how they managed to con us out of our hard earned money. They see themselves as the smart ones and the rest of us as mugs. Perhaps they will get their cum-uppence one day perhaps they won’t.I’ll do my best to ensure that justice eventually gets the upper hand however long it takes. Will there be any in change in Cyprus ? Not in the near future because it seems that Cypriots aren’t brave enough to vote for a complete change and have their cosy (but corrupt) system changed completely.
Ultimately it is only the Cypriot voters who can cause real long term change. The toothless, ineffective complete joke called the EU is probably as corrupt as Cyprus appears to be so we cannot look to them for any meaningful intervention. Perhaps voters Europe wide need to be a little braver when the elections for Euro MPs comes around. I for one will be voting for UKIP in the UK next time. The sooner we are out of the European Union the better. The EU, who have never been able to produce certified accounts since its inception, trying to tell a little corrupt island like Cyprus how to be honest, what a joke !! Vote Paul Lambert for president of the EU !! My first action would be to disband the whole thing !
I can’t imagine Chinese and Russian buyers being as tolerant of being ripped off and deceived by Cyprus developers as us, the legally polite British.
Their ideas of getting even are well documented and it would not come as a surprise to me to see some incidences of retribution starting to take place.
Cyprus like Turkey (who attempted to join the EU) thought that joining meant a gravy train of grants, now that the MEPs are involved over the title deed issue Cyprus is learning that there is a price to pay for membership.
It would be interesting just to overlay a Cyprus Property Values graph over the Sales to Overseas Buyers barchart above – which would likely follow pretty much both the upsurge in Overseas Buyers and the sharp decline since the ‘Credit Crunch’ of 2008? Begging the Question: how Low will Cyprus property values go?
Given all the negative impacts now, and austerity almost everywhere, one can only project that the ‘bottom’ of the Cyprus Property market is still some way off. And therefore likely that only property sale prices dipping still lower will start to attract enough Speculators back into the Cyprus markets to re-kindle an already overall depressed market. And the fact that RoC stayed in denial for some 4+ years suggests that the new and upcoming Troika bail-out requirements will merely delay any potential ‘rebound’ for at least another 5 years!
So little wonder those developers with properties still to offload are frantically and it seems desperately targeting ‘new’ – and potentially very large – markets elsewhere. But, as the point has been made very well elsewhere in this Forum, if old attitudes and practices are allowed to continue (and it seems on recent evidence they are being), then even more people in the world will realise that the ‘Cyprus economical miracle’ was built on sand – as well as sunshine.
Can ANY potential new Cyprus government turn this classic Boom to Bust economic scenario around – on what I’ve seen so far, sadly not a ‘snowball in Hell’s’ chance, at least in the short/medium term. How very, very Sad.
No Nigel they will never learn. They will just keep looking for new victims as many of us have posted on previous occasions. It was only a matter of time before the first Chinese victim surfaced.
They just do not get it.