Latest Headlines

Property sales crash 44 per cent

The number of properties sold during the first ten months of the year has fallen sharply, down 44 per cent on the numbers sold during the same period last year with no prospects of a recovery in the foreseeable future.

PROPERTY sales in Cyprus this year have crashed 44 per cent compared with last year with the recession, record levels of unemployment and the unresolved Title Deed problems all taking their toll.

Figures published earlier today by the Department of Lands and Surveys reveal the extent of the problem. The number of contracts for the sale of property deposited at Land Registry offices across the island in October stood at 310 compared with the 454 deposited in October 2012; a fall of 32% from last year’s low levels.

Of those 310 contracts 77% (239) were deposited on behalf of domestic buyers, while 23% (71) were deposited in favour of overseas buyers.

Domestic demand fell by 23% and overseas demand slumped 30% compared with October last year.

Sales fell in all districts. Famagusta was the hardest hit with sales dropping by 53%. Sales in Paphos fell by 38% and those in Limassol by 37%, while sales in Larnaca and Nicosia fell by 20% and 9% respectively.

Cyprus property sales (total) October 2013

During the first ten months of 2013, total sales are down 44% compared to the same period last year having fallen to 2,994 from 5,330.

Domestic sales

Domestic sales during October were down 32% compared with October last year, having fallen to 239 from 352; sales were down in all districts.

Paphos was the hardest hit with sales dropping 43%. Sales in Famagusta fell by 40%, those in Limassol by 34%, while sales in Nicosia and Larnaca fell by 23% and 18% respectively.

Domestic property sales October 2013

During the first ten months of 2013, domestic sales have slumped 48% compared to the same period last year falling to 2,186 from 4,198.

Amid the island’s deep recession and slowing economy, more than 76,000 are now out of work, with nearly 44% of those aged 25 or less. To cope with the soaring number of redundancy applications, the Labour Ministry is reported to have hired 45 jobless university graduates who have undergone special training.

Overseas sales

Sales to the overseas market fell 30% in October compared with October last year, having fallen to 71 from 102. Although sales in the capital (Nicosia) doubled, sales fell in all other districts.

Famagusta was hardest hit with sales falling 80% compared with October last year, while sales in Limassol fell 47%. Sales were also down in Larnaca and Paphos, falling by 27% and 21% respectively.

Overseas property sales October 2013

During the first ten months of 2013, property sales to the overseas market have slumped 30% compared to the same period last year falling to 808 from 1,132.

Naïve optimism?

The Final Report and Recommendations by the Independent Commission on the Future of the Cyprus Banking Sector, which was released on 31st October, contains the following statement:

“We believe that Cyprus” small size could make recovery more achievable than in larger countries going through a similar process. For example, the unsold inventory of vacation houses is about 50,000. Provided prices are lowered sufficiently after repossession by the banks, an inventory of this relatively small size could be cleared quickly through sales to foreigners.”

In light of the fact that during the peak year of 2007 a total of 11,281 properties were sold to foreigners and that since 2009 the average number of properties sold each year to foreigners is approximately 1,600 – it seems somewhat naïve to say that the unsold inventory of 50,000 vacation homes could be cleared “quickly”.

Even with a massive reduction in prices, which would further depress property prices and their value as collateral, it is unlikely that these vacation homes will sell “quickly” unless they have their all-important Title Deed.

Readers' comments

Comments on this article are no longer being accepted.

  • Ann Hawkins says:

    After 13 years our Developer has at last applied to the Land Registry at Paphos for separation and we have now got an AX number. Can you give our group any idea of roughly how much longer it will be before we are offered the opportunity to purchase our deeds.

  • @Peter Davis and @Denton Mackrell

    It is also possible to sell a property without any money entering or leaving Cyprus thereby avoiding the capital controls completely.

    I understand that a number of lawyers have established client accounts in other countries to facilitate this.

    But the money to purchase the property has to come from overseas.

  • Denton Mackrell says:

    @Peter Davis. Don’t dispute your comments as things stand. However, it is possible to get money out of Cyprus at (I believe) some Euro 15,000 per month under current capital controls, which according to the govt are to be lifted completely by March 2014. So, depending on whether govt statements prove to be accurate or not, for a sale of, say, Euro 180,000 it will take as now either 15 months to fully transfer out or, as from March, all in one go.

    However, far more important in any possible market recovery is the ‘consumer psychology’ factor. There is a whole mountain of deterrents that will continue to put off foreign buyers from buying in Cyprus, the Title Deeds scandal in particular and the general mood among them that everything to do with the Cyprus property market is just far too untrustworthy and financially dangerous.

    The Russians have been cited by some as ‘filling the gap’ caused by loss of British buyers but that is fanciful. The baseline numbers of Russian tourists here is around 300,000-350,000 pa. The current baseline of British tourists is around 950,000, down from about 1.3m 7-8 years ago. It would be some feat for the number of Russian tourists to DOUBLE just because of new winter flights!! Let’s be generous and say that another 100,000 do actually come. The number of properties on sale apparently are 50,000 new and probably another 75,000 re-sale. So, one in every 6 Russian tourists would have to buy just to reduce the glut by half! I don’t think so!! The Russians too now know all about the Title Deeds scandal.

  • Peter Davis says:

    People do not wake up one morning and say. “I know I will buy a property in Cyprus”. They visit the country as a holiday maker, enjoy the experience and then consider buying.

    The British by tradition are owner/occupiers others such as the Germans rent even in their own country.

    Now we have 300,000 Russians visiting this winter(nearly half the population of Cyprus at 800,000 if you believe that story) it will be interesting to see if they will buy when everywhere is shut for the winter and the establishment that are open are indifferent.

    Of course having sold the seller can’t take the money out of the banks so how are they going to buy another property in the UK?

  • @Janner – due to the ‘stupidity’ of the bankers + the nefarious practices of developers + the inaction of government, Cyprus is in a big hole of its own making.

    It does all come down to money and someone will have to pay – European taxpayers perhaps :-(

  • Janner says:

    I am no economist. But isn’t this entire business of NPL’s and purchasers properties being used as collateral for developers loans and so on hugely important? Forget the legalities of it all. The troika and the Cypriot elite are not stupid. There is a reason why this economic nightmare was allowed to exist in the first place and there is a reason why it isn’t being tackled now. Like I said, I’m no economist, but if I had to bet my pension on it I’d say the reason is simply ‘money’. It’s always about the money. Those with a vested interest know it. I can’t help but feel we are all being lined up for the kill.

  • Steve.R says:

    It isn’t getting any better and in fact things are getting worse. In my case time hasn’t healed anything. After 5 years our developer is now in liquidation so any glimmer of hope regarding our title deeds has gone. How long will it be before other developers go the same way. Not long I guess as the banks/troika are pushing to recover NPLs.

    In another 2 years the liquidators are going to have a portfolio of thousands of properties on their books. They do not have the facilities to obtain title deeds so where do they go from there. The vultures are hovering and circling over Cyprus.

  • andyp says:

    We always come back to the same thing, TITLE DEEDS.

    The people who write these reports are dreaming.

    Until buyers are actually free to sell their properties unencumbered by the fraudulent loan left there by a crooked developer, assisted by greedy and corrupt lawyers and bankers, the market has no chance of recovery. Nothing new here as we have been saying so for years.

    The government is not listening but potential buyers are.

  • David says:

    Still waiting buy a property to retire to in Cyprus.!! Still living in the UK.!! Still waiting for the Cypriot Government to sort out the Title Deeds fiasco.!! Until my Solicitor says we will obtain deeds PRIOR to handing over any money, it’s a no-brainer.

    Why is it I now believe it will never happen? Thank goodness we were well advised some 6 years ago now. Plus of course, the price of property is at least 50% cheaper. But still much more expensive than other desirable countries such as Spain.

  • Martyn says:

    Bundle all the above negatives together and ‘naive optimism’ doesn’t even START to accurately describe what’s happening to Cyprus property markets. The banks haven’t even started yet to deal with the majority of their NPLs, many of them ‘secured’ on properties that have NO clear title, multiple mortgages and in developments where developers have simply ‘walked away’ leaving many other owned and/or occupied properties without many services and little or no chance of ‘escaping’. There is no ‘magic wand’, the government will have to face up to and tackle these complex inter-related deep-rooted problems – and meantime the downward spiral in ‘completions’ and values will continue.

    Personally, and very sadly for so many owners’, I can only see several more years of this downward spiral and, trying to be at all positive, maybe a ‘bottoming-out’ in 2019 with the start of another property-based Bonanza.

  • Joe Hunnam says:

    I already own a property in Cyprus, no mortgage on it.

    I paid the full amount on completion approx 9 years ago.

    I have an email off the developer on completion stating I should have deeds within 3 years. I asked about deeds only last week, did not get a satisfactory answer.

    We continue visiting Cyprus obviously as we have a vested interest.

    Getting back to my Comment, do I own the property,.
    I really don’t think so.
    Would I buy a second property, I really don’t think so.

    So the housing market has crashed, the economy is in a mess and the Cypriots are supposed to be the experts when it comes to real estate. Until I am in possession of my deeds, that would certainly go a long way in restoring my confidence and if they ever do sort it hopefully before I retire I may well consider another purchase but only with deeds on completion of sale, (so simple) is it not.

  • The views expressed in readers' comments are not necessarily shared by the Cyprus Property News.

  • Text size

Back to top