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Property prices set to rise says sales director

Director of sales at BuySell Cyprus Chris Hajikyriacou believes that property prices have bottomed out and should start to rise, warning that if you don’t buy now, you’re going to miss the boat.

Cyprus property prices set to riseREAL estate prices have hit rock bottom over the past year and should now start moving upwards, a major property reseller has said.

“Now is the time to buy, otherwise you’re going to miss the boat,” said Chris Hajikyriacou, sales director at BuySell Cyprus.

Hajikyriacou, upbeat about the market’s prospects despite the depression, told the Mail that demand is about to outstrip supply.

That could only drive prices up, he predicted, but added that the process would be a gradual one – six months to a year.

He was commenting on the latest property price index issued by the Royal Institution of Chartered Surveyors (RICS) this week. The RICS Cyprus metrics showed that, compared to Q4 2012, prices dipped 13.3 per cent for apartments and 10.5 per cent for houses.

Meanwhile, for the same period rents fell 13.3 per cent for flats and 12.3 per cent for houses.

Central Bank data shows that since Q4 2008 there’s been a 23 per cent decline in the residential property price index (flats and houses). The index peaked just before Q4 2008.

The downward path kicked off in the last quarter of 2008 after the collapse of Lehman Brothers in the United States and the ensuing global credit crisis.

And during 2013, the Central Bank’s index shrank by 7.2 per cent.

The figures cited both by RICS and the Central Bank sync appear to be accurate, Hajikyriacou said.

“Given inflated prices during the 2007 to 2008 housing bubble, a price correction of approximately 25 per cent sounds just about right.”

By way of example, a three-bedroom property, with swimming pool, in Peyia recently went for €155,000 – a bargain considering prevailing prices in previous years.

According to Hajikyriacou, the market picked up steam during the first quarter of 2014, during which BuySell has seen a 600 per cent sales increase compared to the corresponding period last year.

Buyers include Russians, Britons, investors from the Middle East (Lebanon and Egypt) and Scandinavia, and even Cypriot expatriates.

Britons in particular have been taking advantage of the sterling’s rise against the euro in recent months.

The increase in both inquiries and actual purchases extends to the off-plan property market, where primarily Chinese nationals and Russians are buying.

The boost has been encouraged through the government’s citizenship-for-investment scheme, where foreign nationals buying new property units see their paperwork come through faster than those who shop on the resale market.

As demand eventually catches up with supply, prices are set to go up.

On the flipside, high mortgage loans – due to banks’ cash-flow woes – as well as the title deeds mess are scaring away many would-be buyers.

From Hajikyriacou’s experience, however, the title deeds situation is somewhat improving. In Paphos, he claims, perhaps as much as 95 per cent of pending title deeds have been issued. But Paralimni and Protaras remain problem areas.

Banks, with massive non-performing loans (many tied to property) on their books, are being extremely stingy with new loans.

“They’re making it extremely difficult for borrowers. The screening process is now so severe, I’ve even heard of cases where a bank asked clients how much they spend monthly on booze or prescription drugs to get a feel for their financial situation.”

That’s a far cry from the halcyon days when lenders carelessly dished out loans relying on unrealistic property valuations from property developers. Moreover, banks had required only a 10 per cent deposit for a mortgage.

That changed when former Central Bank governor Athanasios Orphanides, seeing the danger, instructed banks to raise the requirement to 30 per cent down.

Banks have recorded hundreds of millions of losses from bad loans in the industry. According to an earlier estimate by Pimco, Bank of Cyprus suffered losses of €0.8bn from loans to developers.

Though substantial, the property price correction in Cyprus has been milder compared to what has taken place in other “memorandum” countries, such as Greece or Spain.

Says Hajikyriacou: “Property in Nicosia and Limassol is still slightly overpriced, though not in the other districts. But overall, I’d say that nationwide the price correction has gone too far, and as people start getting over the shock of the haircut, values should rise by at least 10 per cent in the next 12 months.”

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Readers' comments

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  • Peter Howard says:

    Interesting comments from BuySell and as a reputable property agent I would disagree with him, but also disagree with some other comments on this site. Too many sweeping statements as there are wide differences between areas and types of property. It is a bit like comparing the property market in London to that in the North East of England. It should also be noted that because of the publicity generated on this site and others – there is a big difference between demand and pricing for properties that have Title Deeds and those that do not.

    For example there is good demand for all property in the Polis/Latchi area with Title Deeds. The same for villas in Peyia, Coral Bay and Sea Caves with Title Deeds – I am sure that properties in these areas have ‘bottomed out’ as there is a shortage, however apartments in the middle of Paphos without Title Deeds are probably going to drop further, as there are so many available and with many distressed sellers.

    I would agree with BuySell that there has this year been an upturn in sales and interest to buy in Cyprus and the bulk of our buyers are still English – but very cautious to check everything out thoroughly, and wanting Title Deeds.

    Much blame for the current problems, and Swiss franc loans, are laid at the hands of banks – I tend to disagree. I have been here many years and put much of the blame on the large companies, long since gone, who offered short high pressure inspection visits to purchase property. Normal sane and sensible people would buy the first property they viewed, often being persuaded to buy a second property as an investment, then go to the developers ‘pet’ lawyer and take a Swiss Franc mortgage as it was cheaper. On a daily basis we come across people who were persuaded to buy property they could not afford, large mortgage payments,and a property that they cannot sell – very sad. Fortunately with the power of the internet we find that potential buyers are now doing a lot of research before visiting Cyprus, so hopefully these dubious tactics have now finished.

    I also agree that the Title Deed situation seems to be improving, several times I have seen surveyors working on a Saturday !! Again this is more applicable to villas and small developments – I have serious concerns that many of the larger developments in the Paphos area, will ever receive their Title Deeds. In conclusion I am optimistic about the property market here in Cyprus, but do not foresee large price increases over the next couple of years – and unlike BuySell I do not see anybody buying off plan for many years.

  • Lorenz says:

    Do you really buy, what the buysell boss tries to sell? Spain is the lesson: property prices really drop when the firesales of banks will start. Cyprus has not even started with the banks offloading bad loans … Only the buysell now.

  • Andrew says:

    “In Paphos, he claims, perhaps as much as 95 per cent of pending title deeds have been issued”.

    Who have these Title Deeds been issued to? The banks, maybe, but certainly not to the buyers.

  • andyp says:

    Yet another clown working in the Cyprus property industry. They never give up with their “good news” B-S.

    Can someone please explain how 95% of “pending” title deeds have been issued? Are they pending or issued? I think I need a lie down.

  • @Spirit of Odd Job Bob – “Surely some mistake? Editor”

    Nah – I just enjoy winding you up :-)

  • Frank says:

    Property prices set to rise says sales director at BuySell Cyprus.

    Pigs set to fly grunts sales director at Porcine Airways.

  • Spirit of Odd Job Bob says:

    STOP PRESS: An URGENT bulletin in the Alashiya Chronicle.

    A local wolf, Chairman of the Lupines For Justice group, has expressed optimism concerning the plight of the local Three Little Piggy population of Alashiya, who have taken to barricading themselves in their (devalued) homes and not going to market, for fear of being devoured.

    The wolf explains: “All the problems that a piggy MAY potentially have experienced when going to market have now been eradicated and – despite the evidence of your eyes which you WRONGLY believe show the wolf-fang ripped, bloody and decaying carcasses of other little piggies on their way to market, as well as the agonised and tormented cries of those currently suffering after wolf-attack, screaming: “Give us our title deeds!” – are all figments of your imagination anyway”.

    When pressed on when and how the market will improve from the more militant “Save Our Bacon” faction of the Three Little Piggies movement, some of whom went to market but no buyers could they find for their tainted meat, the LFJ Chairman angrily replied: “You see, it’s the same “glass half empty doomsayers” who are always talking down Alashiya, as part of a hostile foreign plot to undermine our beautiful country cos their just jealous and hate Alashiyans. If they’d only followed my last set of disastrous and completely incorrect advice (“The End is Nigh”, 5/3/2011 “time to invest savings as the property market is devalued” and “Is help at hand?”, 26/6/2011, “(you have a..) 99% chance of receiving deeds for €4000”) then I’d now be considerably richer and wouldn’t have to write these articles any more” (Surely some mistake? Editor).

    In other news, Head of Property Sales Company talks up market (obviously no conflict of interest here). Again…

  • Costas Apacket says:

    Having had extensive experience of the last ‘boat trip’ I think I’ll remain on the quayside this time around, but if anyone else wants to board the Titanic just be aware that you will need to take your own life jacket and don’t expect to arrive at your destination anytime soon.

  • David says:

    He should have been a politician.!! They believe what they say… BUT … it’s another example of hope over experience. The Cypriot housing recovery is at least 2 years away…..if it ever does recover.

  • Deanna says:

    Dream on Mr BuySell.

  • Adrian says:

    I would like to know what information Mr Hajikyriaco has that nobody else has access to, would he like to publish the facts such as how did he come to a figure of 95% title deeds are ready and if they are can they be release or are there “administrative” delays.

    When Mr H can produce the facts I will read his views but until then he is only fooling himself as nobody else believes it.

  • Brian C says:

    “I’ve even heard of cases where a bank asked clients how much they spend monthly on booze or prescription drugs”.

    What drugs is Mr. Hajikyriacou taking – B*llsh*t pills?

  • Mike says:

    Aesop was also a Greek story teller renowned for his fables, fairy stories and wild imagination, but he had credibility and published his work in order to entertain not to deceive.

    Nice try but failed.

  • Milo says:

    Will we see this dynamic 600% sales rise in the Q1 2014 in the next sales figures? Whenever I see sales figures they fall month on month every year…

    I want to sell my property but I wont give it away for less than what I paid for it six years ago, nearly all of our life savings are in it, we did everything right and got the Deeds, but still the years of bad sales practice, greedy banks and a previous govt which bankrupted the country ruined our chances of wanting to move on and we are one of many who cannot do so. We’re stuck in a limbo of no buyers and no mortgage lending, if suddenly there’s loads of foreign buyers on the island they don’t seem to be reflected in recent foreign sales figures, it’s pretty dismal.

    Its mentioned about the sale price index maybe being correct….but who complied the sales price index pre 2007? The banks used that unscientific index to give out mortgages at that time, so I’m sure there’s many mortgages way above the real value of the property. The price indexing just a few years ago IMO were misguided and not a true refelection of actual value.

    But now banks don’t give out mortgages on the island, unless it’s a cash buyer what hope is there?

    This chant is repeated by all buyers who really know the proper truth, get the Title Deed issue sorted now, make all bad practice illegal, reflect the previous bad practices in proper and swift justice for the buyers affected, make new transparent and streamlined regulations that buyers can be reassured by, get rid of the slow practices that hold many back…in other words IF you want a decent property market back, Cyprus itself has to make the changes, only then will it really pick up.

  • MartynG says:

    HA! It’s the job of Sales Directors of Property Sales Agencies/’Resellers’ to ‘talk up’ the state of property markets. And hey, the Sales Director of none other than BuySell Cyprus, in my view one of the very least ‘professional’ ‘agencies’ (they seem to be careful not to call themselves an Agency) on the island, one with a distinctly chequered past. Yes, of course there will always be some cash-rich Russians and Chinese trying to buy their way via ‘Citizenship for Investment’ into Cyprus but he chooses, but Mr.H seems to ignore completely the thousands of unfinished properties on the island, the thousands more distress sales still failing to find buyers, even interested potential purchasers, not to mention the horrendous overhangs on Title Deeds that so far, despite what Mr. H says, the Cyprus government has failed to find any real solution to/for, the post-March 2013, severely tarnished international reputation (deserved or otherwise) of Cyprus and Cyprus banks – the latter still trying to find a way of remedying/rectifying many 10s of thousands on Non-Performing private, commercial property and developer loans that likely will take at least 5-10 years to unravel !

    Dream On Mr H, but the bulk of the ‘thinking world’ will I suspect choose to ignore your wild prophecies and predictions, look at the complete mess that the Cyprus economy, it’s banks and it’s now internationally recognised dubious property transfer system are in and find better, more stable markets that offer ‘fun, safety and good living in the sun’ – and some hope at least of some stability and steady capital appreciation into the future.

    “Now is the time to buy otherwise you’re going to miss the boat,” Mr. H says. I’m not sure which boat he is referring to but I do hope he can, hand on heart, somehow convince at least some of us that it’s a boat that is seaworthy, durable, properly captained and crewed, not some hastily constructed life-raft that might see a few Property Sales Agencies convince a few hopefuls that it will float them through to some attractive new yet-to-be-accurately-defined interpretation of the bombed-out Cyprus property markets.

  • Jayne says:

    Anyone who buys in Cyprus again is a fool !!
    He would say that wouldn’t he as he is selling properties
    Buyer beware

  • Peter says:

    Buy a property in Cyprus again and get ripped off again, no I do not think so.

  • Peter Davis says:

    Dream on. There’s no place in Cyprus for new builds.

    It’s like playing Russian Roulette. You have no idea if you will ever get your title deeds or ownership of your home, or just maybe the developer has another mortgage against it (or even several) or will he fold to the bank and give your house away?

    Don’t touch anything without title deeds, so you need to buy re-sale only.

    Anything else will lead to years of heartache.

    Bad bad Cyprus.

  • JAY says:

    It is nice to dream

  • mh says:

    Dream on Mr Hajikyriacou! Cyprus property problems are FAR FAR worse than Spain, you just don’t see it yet do you?

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