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Developers want more time to pay banks

A spokesman for the island’s property developers believes that a fire sale of real estate during a recession would not be good for the country and developers are asking for more time to settle their debts.

FORECLOSING on large developers would not solve the liquidity problems faced by banks, but they are asking for time to settle their debts and continue to operate.

Speaking on behalf of the developers, Andreas Sandis said the country’s interests would not be served if there was a fire sale of real estate during a recession and while the construction sector was at its lowest ebb.

Foreclosures would be catastrophic for the sector, he said, suggesting they could come to an arrangement with banks to pay an instalment and cover the interest to prevent seizures.

Interior Minister Socratis Hasikos said on Thursday that €500m worth of foreign investments were made in Cyprus during the last eight months of 2013, primarily through the land-for-residency scheme, primarily to non-EU nationals, such as Chinese and Russians.

Developers have asked the government to provide additional incentives, and expedite procedures.

Sandis said the incentives could be more attractive to appeal to foreign investors who would bring their money to Cyprus.

He said state departments must push for title deeds to be issued immediately so that property owners receive them as soon as the home is completed.

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Readers' comments

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  • @Mr.NC – thank you for your comment. Although I agree with you that foreclosures should take place, it’s imperative that those who have bought properties and who have yet to receive their Title Deeds are protected.

    Currently a number of development companies are being liquidated and the liquidators are demanding that those who have bought property repay an element of the developer’s outstanding debt even though their have paid for their homes in full.

  • Mr.NC says:

    Developers trying to pull the wool of our eyes here. I believe the complete opposite, it will not be a catastrophe if the forclose. What will happen is that all the equity used by these developers will be wiped out, the current market value will be implemented and when sold a new developer who HAS the capital will the proceed with the development and then the market kicks in! Builders, planners, workers all that are needed for such will be employed and money is pumped into the economy and it will trickle down to others as People will have cash.

    There is a need to proceed with forclosure.

  • David Wright says:

    How much more time to these people want! I want my deeds but I ca’nt get them because my damn developer has’nt paid off his mortgage and he has’nt paid his property tax!

    Ive been waiting 10 years.

  • @Pete – Thanks that is good news. Presumably the company has paid the reported €2,376,356.10 it owed to the Inland Revenue for Immovable Property Tax and has cleared any debts it may have had with the banks?

  • Janner says:

    So, the developers haven’t been paying their loans but can now stump up some cash and cover the interest. Why weren’t they repaying in the first place then?

    And there I was thinking that Cyprus had itself in such a pickle with this web of lending when the answer was staring me right in the face. They simply need more time.

    Maybe I should get myself a fancy job with a financial institution. I could solve all the economic problems. Greece. No problems….just give them more time!!

    Brilliant idea. Crisis over!

  • Pete says:

    Hi Nigel.

    I hope your well, a bit of news on Aristo’s web site, 692 title deeds ready to collect, I haven’t been notified myself. 11 years on. Good news for 629 though.

    All the best to you,

    Peter Matthews

  • andyp says:

    With the consent of the banks developers made very little effort to service their debts let alone repay them. More time to repay will simply compound the debt and as such they might as well foreclose now.

    The situation which must be addressed is protection for property buyers who are innocently caught up in the mess created by the bankers and developers with the aid of corrupt lawyers.

  • Adrian says:

    I note Mr Sandis said “State departments should push for title deeds to be issued on completion of the home”, now there is a novel idea, Mr Sandis, you will find that for the last 15 years at least, people having been pushing mostly uphill so you will find that about 130,000 people would agree with you.

    What would you do with the unpaid loans and taxes of the developer before the OWNERS can be given their title deeds?

  • Mike says:

    Two points really; If developers have been unable to service loans for a good number of months or years to date how are they suddenly going to be in a position to do so from today?

    Second point is does the land-for-residency scheme, primarily to non-EU nationals, indicate that residency is given when money is handed over for a property or is it withheld until such time as title is transferred into the buyers name which is after all when the buyer can claim they have property in Cyprus. Which then would beg the question have any Chinese or Russian investors actually received residency in return for their €300k and was it before or after receipt of title deeds. If the former then surely a double standard is being applied here. State sponsored prostitution in another form perhaps.

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