ECONOMIC instability, lack of liquidity, high interest rates, record levels of unemployment and uncertainty over the future have brought Cyprus’ property market to a virtual standstill.
Latest figures from the Department of Lands and Surveys show that a total of 267 contracts of sale were deposited at Land Registry offices across Cyprus in June 2013 compared with the 543 deposited in June last year; an annual decline of 51%.
Of those 267 contracts, 77% (205) were deposited on behalf of domestic buyers, while 33% (33) were deposited in favour of overseas buyers.
Sales fell in all districts: Nicosia -66%, Famagusta -60%, Larnaca -55%, Paphos -44% and Limassol -34%.
During the first half of 2013 a total of 1,779 properties were sold, falling 52% compared with the 3,710 sold during the first half of 2012. This downward trend is expected to continue while the downturn in the island’s economy persists.
Domestic sales
Domestic sales in June were down 53% compared with June last year, with sales falling in all districts.
Sales in Nicosia fell 63%, while those in Larnaca fell by 61%. Sales in Paphos, Limassol and Famagusta were down 49%, 45% and 38% respectively.
Speaking to Stockwatch, property valuator Polys Kourousides attributed the fall in sales to the lack of liquidity in the market.
Mr Kourousides noted “People expect the situation in the banking system to be stabilized in order to make movements” stressing that “the only solution for the industry’s recovery is to offer incentives to foreign investors.”
During the first half of 2013 a total of 1,278 properties were sold to domestic buyers compared with the 2,910 sold during the first half of 2012; a fall of 56%.
Overseas sales
Overseas sales in June were down 43% compared with June last year. Famagusta recorded zero sales, and sales in all the other districts fell.
Sales in Nicosia fell 85%, while those in Paphos fell by 19%. Sales in Larnaca and Limassol were down 17% and 3% respectively.
Antonis Loizou FRICS said that although the Chinese market boomed between October 2012 and April 2013, it has slowed as a consequence of the Eurogroup decisions and the behaviour of a number of property developers who had sold homes at a value higher than their actual worth.
Mr Loizou warned “Developers should be very careful because the Chinese market is the only market left and we should not think that we can exploit them because there are other countries that offer similar incentives”.
Mr Kourousides said “We need entrepreneurs to behave with maturity and responsibility and to be aware that the competition is international and exacerbated,” adding that we should protect the interests of foreign investors and buyers.
During the first half of 2013 a total of 501 properties were purchased by overseas buyers compared with the 800 they purchased during the first half of 2012; a fall of 43%.
No one is buying in Cyprus because the prices are too high. To go with its high property prices, Cyprus also has the highest electricity and food prices in the EU. If you want a house-buying deal with residency attached, the offer from Spain is better than that from Cyprus.
In spite of all this, the Chinese were willing to buy here, but now they have been put off by greedy property developers’ asking €300,000 for one-bedroom flats because that is the minimum value to qualify for residency.
Moreover, the developers want their new apartments and houses to sell, rather than the second hand offerings from the public. The absence of title deeds makes the latter harder to sell, so don’t expect any sudden moves to resolve the title deeds debacle.
@Andrew
Property valuer Polys Kourousides attributes the fall in sales to the lack of liquidity in the market. Not a mention of Cypriot developers mortgaging or taking out loans on a sold and occupied property. Not a mention of the Title Deed scam.
Had the Title been available at the point of sale, developers would not have been able to rack up such debts.
It makes me wonder if:
a) Cypriots actually understand what the problem is and,
b) Whether those managing the ‘system’ were in cahoots with developers in the first place….
‘Property developers selling homes to naive Chinese buyers at higher values than their actual worth’? Whoever heard of such a thing!
Tens of thousands of buyers have been waiting for years in the hope of receiving their title deeds. Now they find huge developer mortgages which were not disclosed. Is it any wonder that no one wants to buy in Cyprus?