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Encouraging property sales

The number of property sales in Cyprus increased for the seventh consecutive month in September compared to last year with sales up in both the domestic and the overseas markets.

PROPERTY sales in Cyprus increased for the seventh consecutive month in September compared to the same period last year according to the latest figures from the Department of Lands and Surveys.

During September a total of 373 contracts for the purchase of ‘immovable property’ (i.e. commercial and residential properties and land) were deposited at Land Registry offices across Cyprus; a 31 per cent increase on the 285 contracts deposited in September last year.

Of those 373 contracts, 107 (26%) were deposited in favour of overseas buyers, while the remaining 266 (74%) were deposited in favour of domestic buyers.

With the exception of Nicosia, where the number of sales fell 27%, sales improved in all other districts compared to last year. Sales in Paphos increased by 76% and those in Limassol rose 76%; sales in Larnaca and Famagusta rose 20% and 9% respectively.

total property sales sept 2014

Speaking to Stockwatch the vice president of the Cyprus Real Estate Agents’ Association Solomon Kourouklides said “people expected that the foreclosures bill would be approved and many rushed to make sales to service their loans. These are exceptional sales made by developers and individuals under unusual circumstances” and added “There is a second type of sales as well; some are trying to take advantage of falling prices in the property market.”

Year to date sales

During the first nine months of 2014 total property sales reached 3,328; an increase of 644 (24%) on the 2,684 sales achieved during the first nine months of 2013.

Sales in Limassol are up 50% compared to last year, while sales in Famagusta are up 37%. Sales in Larnaca are up 24% and sales in Nicosia have risen 16%; although sales in Paphos are up, their numbers have increased by a mere 4.2%.

Domestic property sales

Although domestic sales in September rose by 28% compared to last year, this increase was due a 184% increase in Paphos and a 51% increase in Limassol. Sales in Famagusta declined 50%, while those in Nicosia and Larnaca fell 33% and 17% respectively over the nine month period.

domestic sales sept 2014

Year to date sales

During the first nine months of 2014 domestic sales reached 2,442; an increase of 495 (25%) on the 1,947 sales achieved during the first nine months of 2013.

Sales in Limassol are up 60% compared to last year, while sales in Larnaca are up 17%. Sales in Nicosia are up 14% and sales in Paphos and Famagusta have risen 11% and 6% respectively.

Overseas property sales

Sales to the overseas market rose 31% in September compared to the same month last year. Sales increased in all districts with the exception of Paphos, once a British expatriate hot-spot, where the number fell to 37 from 40 last year; a drop of 8%.

Bearing in mind that overseas sales are trying to recover from a very low base, 15 sales were achieved in Famagusta (up 400%), 26 sales in Larnaca (up 189%), 7 in Nicosia (up 17%) and 22 in Limassol (up 16%).

overseas sales set 2014

Year to date sales

During the first nine months of 2014 sales to the overseas market reached 886; an increase of 149 (20%) on the 737 sales achieved during the first nine months of 2013.

Sales in Famagusta are up 124%, those in Larnaca are up 48%, while sales in Nicosia and Limassol are up 38% and 24% respectively.

However, sales in Paphos have fallen to 331 during the first nine months of 2014 from 352 during the same period last year; a fall of 6%

Readers' comments

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  • Mike says:

    Denton Mackrell says: October 9, 2014 at 8:59 am If sales in Oroklini are anything to go by, it would appear that most if not all sales in the past 6-9 months have been re-sale, with Title Deeds, selling at under €200k. No sign of new builds selling and, indeed, there is a considerable overhang stock of grey-build and ‘new’ stock unsold for typically 5 years. Thus, developers are not benefiting much from the recent sales ripple.

    What do you think about plots of land on the Dhekelia road?

  • Mike says:

    I wonder what discount off the 2007 peak price is average for the properties selling. Are we really talking about 70% as some people have told me?

  • Denton Mackrell says:

    For what it’s worth, the recently published Quality of Life Index published by the Centre for Future Studies for NatWest International Personal Banking does not feature Cyprus in the top 12 countries favoured by UK ex-pats. Maybe they are all waiting to see the outcome of the current idiocracy in Cyprus?

  • Spirit of Odd Job Bob says:

    Oh dear Messrs Davis and Waring, so pretty much all property on Cyprus is an accident waiting to happen (depending on the honest, objective and open deliberations of the Troika)? Whoever would have thunk it!

    Sorry I’ve been away recently, but there was an Odd Job conference (Odd Job Klaus submitted a hugely informative report on the Cyprus State’s negotiations with the Troika; more on that later!) It’s nice to be back (although I’ve just received orders to go to Kobane…)

    A spirit’s (odd) job is never done. Whoooh…

  • Peter Davis says:

    @ Spirit of Odd Job

    What Alan Waring is saying is truth.

    The banks have approaching 50% NPL. In the UK such a company would be classed as insolvent and guilty of illegal trading. Only in Cyprus would such a situation be deemed acceptable. Of course we only have the banks word that NPL are in fact only set at that level. Would you trust them to produce accurate figures?

    The fact the home (with deeds) are still exchanging hands doesn’t mean the money is coming to Cyprus, many of the British buyers get paid in Sterling and the money is paid into UK banks. Pay the money into the Cyprus bank and it may become a haircut the following day.

    So how much is a NPL worth. “An old debt is a bad debt” and many NPLs should already have been written off, certainly under internationally acceptable accounting systems after 12 months the debt is regarded as worthless. But in Cyprus it continues to accrue interest and so get more valuable every year. So a bank can wave NPL as collateral, and explain how valuable they are, BUT are they? Particularly when the borrower has no intention, or any money in Cyprus to honor them.

  • Alan Waring says:

    @SoOJB. Ah, so nice to hear your mock outrage! Where have you been hiding of late?

    It’s the Stress Test wot will do it. Today, resale properties selling – joy! Soon, unless the Foreclosures Bill gets through to the Troika’s satisfaction – misery! Who knows what value such non-collateralized properties might have once collateralized properties get zeroed. 50% of current? 25% of current? 10% maybe?

    Sanity? Idiocracy rules, OK?

  • Spirit of Odd Job Bob says:

    Alan Waring, I just don’t get it!

    The very good and noble Estate Agent below is intimating that properties with title deeds are still shifting (thus retaining a value worth investing in), but you on the other hand, are quite boldly predicting, for no other reason than ‘irrecoverable collateral being held to securitise more debt than one can shake a stick at’ will have a devastating effect on ALL property.

    Surely both assertions cannot be correct? Are you not just scaremongering and questioning the judgement (and sanity?) of the 2,442 good souls above?

    I think we should be told!

  • Peter Howard says:

    As an estate agent I can agree with many of the comments below. Sales of property and enquiries from potential clients are certainly picking up but due to forums like this most people are playing safe, and looking for properties with Title Deeds.

    As a rough guide I would say that more than 75% of our sales are with Title Deeds, and 15% are properties with an AX number – and we occasionally sell a property without the final paperwork, but on those occasions we do a very careful check at Land Registry for mortgages, and it also depends on the developer. Many developers we avoid like the plague, unless they have Title Deeds, but some are more honest and straightforward.

    Off plan – forget it !! I cannot remember when we last sold an off plan property, but it was a number of years ago – this is why developers are having a nightmare time, and slowly increasing their debts. Also large completed developments, mainly apartments, where there are a number of unsold units – are going nowhere because of the prices that the developers are having to ask, to clear their loans. Last week we sold a two bedroom furnished apartment, with Title Deeds for €85,000 – 400 yds away a developer is asking €115,000 for a one bedroom apartment.

    There is no doubt that a 2 tier market is developing, those with Title Deeds and those without. It is a little similar with developers, some of the better ones are pushing ahead and getting Title Deeds for their developments, whilst others are just watching their debts increase and unable to do anything about their developments, although they have already received the money for the properties. All developers seem to get a bad press, but they are not all bad.

    A final comment – we have heard much about the Chinese and Russians rushing to buy up Cyprus property. We still find that 80% of our buyers are English, with some Russians and some buyers from other European countries.

  • @Stuart on 2014/10/09 at 12:12 pm – Unfortunately the Department of Lands and Surveys doesn’t publish the number of overseas sales without Title Deeds. It does publish the total number of transactions (transfers) each month, but these include all types of property for both the domestic and the overseas markets.

  • Alan Waring says:

    My latest Risk Watch article in this week’s Financial Mirror entitled ‘Democracy or Idiocracy?’ warns of the fast-approaching second default crisis (the first being March 2013)in November. Unless the government stops all the nonsensical hold-out for a castrated Foreclosures Bill, which the Troika have already rejected, the government will run out of money and there won’t be a Troika willing to bail them out again.

    An informed reader responded thus:

    “Although a terrible picture is painted in your article, the situation is actually worse than that. The ECB’s stress test results due Oct 28th and 29th are predicated on NPL’s having a value that is based upon a working foreclosures law. With no enacted foreclosures bill, NPL’s have a value of zero as the asset value cannot be realised. This means the banks must recapitalise to cover this new shortfall.”

    Just think on that. All the property collateral held by banks suddenly being reset to zero value, which will also devastate the value of all non-collateralized property.

  • Stuart says:

    Internal re-sales are not a realistic barometer of the property market situation in Cyprus which remains as depressed as ever since no-one with any common sense will be looking to buy new property without title deeds.

    It would be more enlightening if we knew how many of the sales to the overseas market are with title deeds and how many are without. Furthermore, how many of these are new-build and how many are pre-owned?

    Much more detailed analysis would appear to be required as Denton’s comment below would certainly suggest.

  • Steve says:

    It seems to me that the market is splitting, or has split, into two. There is demand for properties with title deeds that is not met by supply and the prices are starting to reflect that. The sales of off-plan, new build and resales without title deeds, suffering from lack of demand, are lagging in price and the gap will increase as buyers realise that if they want title deeds they will have to pay more and those waiting for a bargain with title deeds may regret opportunities missed due to price resistance.

    The potential benefit that may ensue is that developers will use their considerable clout (like they did with transferring responsibility for IPT to occupiers as opposed to title deed holders) to fast track title deeds.

  • Scruffy says:

    Looking at the situation from someone caught up in the title deeds mess, I hope the market continues to be as sluggish for a few years longer.

    The way I see it, the longer the slump goes on the more the banks will realise that they will never recover their huge outstanding developer loans that they foolishly gave out using property as collateral in the full knowledge that subsequent purchasers would have no idea that their land was already mortgaged.

    Perhaps they will be forced to deal fairly with those whom they suckered.

    As soon as the property prices do recover you can be sure that the misfortune of purchasers will be the last thing on their mind.

    So, long may the slump continue.

  • @Denton Mackrell on 2014/10/09 at 8:59 am – I’m hearing a similar story from other people. The resale market is picking up, but most are only interested in properties with their all-important Title Deed, while sales of new property remain sluggish.

  • Mike says:

    And still some are asking for prices more alike to telephone numbers or Kensington and Chelsea prices than the value of the homes. I cannot be the only one waiting to buy in a Limassol village but only at a price reflective of the product, infrastructure, proximity to town, build quality and freely available title ready for transfer. Nothing fancy, something plain and simple with all services will do.

    I know, I know – an almost impossible ask and a quest that has so far eluded me. In the meantime I continue building my own but I do need a ready built to buy. I sympathise with those who paid way over the odds for their property but waiting to recoup the cost may see their lifetimes out and still remain unsold. Their choice of course, so in the meantime we wait.

  • Denton Mackrell says:

    If sales in Oroklini are anything to go by, it would appear that most if not all sales in the past 6-9 months have been re-sale, with Title Deeds, selling at under €200k. No sign of new builds selling and, indeed, there is a considerable overhang stock of grey-build and ‘new’ stock unsold for typically 5 years. Thus, developers are not benefitting much from the recent sales ripple.

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