REAL ESTATE agents were warned yesterday that “appalling practices” of the past have damaged Cyprus’ reputation while similar unprofessional behaviour in the real estate sector today is threatening to destroy the emerging and promising Chinese market.
The message was delivered by Interior Minister Socrates Hasikos and general secretary of the Chamber of Commerce and Industry (KEVE) Marios Tsiakkis at the annual general meeting of the real estate agents association (SKEK) in Nicosia yesterday.
In his address, Tsiakkis highlighted the recent interest in Cyprus real estate from the Chinese market and called on everyone to handle the new opportunity responsibly and prudently.
“I want to take this opportunity to draw your attention to a number of complaints that have already been reported to us about unprofessional behaviour by Cypriot property sellers to Chinese buyers and call on you to give this issue the proper attention,” he said.
“As a country, and you as an industry, we cannot afford to let a small group of non-professionals destroy – at the altar of easy money – an emerging and very promising market which if handled correctly and responsibly can act as a powerful injection for the suffering Cypriot economy.”
Tsiakkis called on the government to take new measures to boost the property market.
“The imposition of new taxes on immoveable property, without curbing non-productive state spending, does not contribute to raising state revenue, or to growth of the economy. These times we are living require more sophisticated approaches to exit the crisis and return to growth,” he said.
He also noted that the real estate sector was the most affected by the crisis as reflected in the property sales recorded in all districts.
Unfortunately, the impact of the economic crisis, the overheated property sector, current banking problems, and lack of liquidity in the market have brought the sector to its knees, he said.
Also addressing the AGM, Hasikos said despite the protracted crisis, Cyprus continues to offer a consistently high and favourable business environment and an excellent network of services that make it an important financial and business centre of the Eastern Mediterranean.
“However, I must underline that unfortunately the good reputation of Cyprus as a destination for investment in real estate has been adversely affected in recent years by the appalling practices of people and businesses, which in many cases exposed the Republic to foreign investors,” he said.
Hasikos called on the real estate association to work both domestically and abroad to restore the name of the Cypriot market.
Outlining government plans for the ailing sector, the minister said his ministry was focused on “promoting radical solutions to the problems facing the sector to give a real boost to growth in the country”.
He expressed hope that significant changes to the real estate and town planning laws “will fundamentally solve the ailments of the past, not only to protect and enshrine property buyers but also to help restore the good name of the Cyprus real estate market abroad”.
Some of the changes required by the memorandum signed with the troika include: the re-evaluation of property values at today’s prices; compulsory registration of contracts of sale within six months of their conclusion; access of the banking sector to the digital archives of the Land Registry; and accelerated procedures for issuing title deeds so that pending title deeds by the end of 2014 are not more than 2,000.
“Our goal is to implement our commitments within the agreed time scales, which are pressing and demanding,” he said.
He expressed the government’s determination to succeed as future loan disbursements depend on it, but also because it considers implementation of the new measures will help rationalise the functioning of the real estate sector.
SKEK chairman Angelos Georgiou warned that certain legal amendments parliament keeps passing are worsening the situation in the real estate market.
Addressing Hasikos, he said the decision to revise the criteria for fast-tracking residence permits for foreign investors in Cyprus has upset the industry, turning things on their head.
As a result, the arrival of Chinese investors in Cyprus has seen a sharp decline, he argued.
Once in the top three locations for British retirees and overseas investors seeking a place in the sun, Cyprus’ fall from grace was sudden and dramatic – precipitated by an investigative TV report by Andrew Winter (below) broadcast throughout the UK on Channel 4 in late 2007.
Here are a few quotes from Andrew Winter taken from his report:
“There are massive problems in Cyprus with Developers abusing property law to make huge profits for themselves…”
“…this cockeyed legal system allows unscrupulous solicitors and greedy developers to get away with fleecing unwitting house buyers”
Very little has changed since the report was broadcast with the Title Deed-cum-fraud mess together with the actions of nefarious property developers in collusion with estate agents, lawyers and bankers continuing to decimate the overseas property market and blacken the island’s reputation.
Will the developers, estate agents and their chums in the legal profession and banking ever learn from their past misdemeanours? Will the Cyprus government enact and enforce effective legislation to protect buyers from the ‘crooks’ and ‘charlatans’ or is Cyprus destined to become a permanent ‘no go area’ for property investors?