IN THE AFTERMATH of the Cyprus Investors Summit, during which 18 projects of several major developers were presented, official bodies are cautiously optimistic that foreign investors will proceed with great deals in the next few months.
But would-be investors representing large funds abroad and creditors of construction companies have a different opinion.
Although investors weighed carefully the big advantages of Cyprus as an EU Member State, the tax system, the highly skilled workforce and the high quality of services, the list of negatives includes uncertainty in relation to the future property prices.
In individual contacts with the heads of 18 development projects of the private sector and in their exploratory consultations with bankers and agents of the state and private sector, they said that the fact that property prices are tied to the distortion of the recent past is a negative element.
Although prices have fallen, they are still well above 2002 levels.
Based on official ECB data, residential property prices have dropped 29% since 2008 but still are 70% above 2002 prices.
Some investors believe that prices are artificially maintained at these levels from the inability of banks to engage in asset sales.
Moreover, the geopolitical and economic conditions, as they develop in the region with the uncertainty in Greece and the challenges of Ankara in the exclusive economic zone of Cyprus, create additional uncertainty in the investment environment.
Under the weight of the above, the investment funds raise an incentives issue.
In their interventions during the Cyprus Investors Summit, they wondered why the presentations were not accompanied by the provision of additional special incentives for investors who will reach an agreement.
The government says through the competent bodies that it has already given a significant incentive to real estate investments, such as the extension of the urban planning coefficient from 5% – 7%.
The Cypriot authorities note that if the agreements are reached, then the competent state departments will be able to give additional incentives.
So far, however, none of the expressed interest in relation to the 18 mature development projects presented at the conference has been developed further, except the announcement of D. Zavos group of companies that it has reached an agreement to sell a plot of land to foreign investors from the Middle East.
The plot, according to the announcement, is strategically located at the Limassol coastal road.
No further details were given.
The development projects presented at Cyprus Investors Summit are:
Shacolas Emporium Park & Limni Bay, Pafilia Tower & Limassol Landmark, Arist Venus Rock & Eagle Pine, Tofarco Lord Byron Towers, Leptos Estates Neapolis Smart Eco City & Blue Marine, Santa Rosa Tower, Makronisos Marina at Ayia Napa, Nicosia City Mall, St. Elisabeth Golf Resort, Vasa Golf Resort, Makedonitissa Estates Project, Elea Estate and Del Mar, which is a consortium of Leptos Group and Zavos Pavilion Business Centre.
I have an option to invest in Cyprus and the property market but I won’t be investing anything until the foreclosure law is resolved. I’m sure there are many, many more like me who are holding pending this being resolved. It is pushing any investment I do make further and further away and we are now looking at the Canary Islands as an alternative because it is more financially stable.
The Cypriot authorities are letting down their country. It’s clear to all they are a vested interest group of individuals.
I brought an apartment in Kapparis off plan in 2004, sold it last year at a loss of GPB30,000. I have another property in dhyernia which I am desperate to get rid of already on the market at GBP20,000 less than I bought it for in 2006. Where does this 70% come from? Fed up with the fantasy land that is Cyprus can’t wait until the day I’ve severed all connections for good
@Peter Howard
Many thanks you fill my heart with glee. But on the estate with seven other houses, two recently sold in the last 3 months the price quoted would, sadly, be about right.
One problem with a very useful and helpful site like this, is people who make comments on what a ‘friend’ has said, or what they have heard from somebody else.
Mr Davis. You say you have a house with central heating and many extras. It is 185sqm and on a mature plot of 1,500 sqm and you have been told that if you sell it, you will only get €230,000 – is it falling down ? Is it in a very bad location? This is a ridiculous price !
I have been an estate agent here for a very long time, and fortunately still successful and selling good value properties, in increasing numbers. I would be pleased to market your property for you, on the basis that when it is sold – you keep €260,000 and I keep the balance as commission !!
If your property is as you have described it – it is worth as lot more than your ‘friend’ has suggested.
Nigel,
Paid C£200,000 for my property in 2002
My estate agent friend said if I put it on the market a realistic price would be about €260,000 but if I was offered €230,000 I should accept it.
My house has granite work-surfaces, burglar alarm, oil central heating, aircon all rooms, fly screens, shutters, oak finished kitchen, fixed gas fire, with 18’x36′ heated pool. floor plan 185sqm, set in a mature garden 1,500sqm.
A fall of about 50% on what I paid, and no where near the 2002 price I paid.
What rubbish, we paid equivalent (CY£) 99k sterling for a two bed apartment 85 sq. mtr in Chloraka in 2004, now selling for around 76k euros. How can prices still be 70% above 2002 prices!
@Dunn Good on 2015/02/14 at 2:12 pm – My 220 sqm. bungalow complete with underfloor heating, Italian carpentry, a proper roof, granite floors, burglar alarm, electric gates and doors on a 50 sqm. double garage, etc., etc. cost me CYP 155,000 in 2002 (+ CYP 14k for the land). Prices of residential properties are still well above 2002 prices.
Strange article!! It says nobody has expressed interest in any of the projects – these are clever International Investors looking at committing many hundreds of millions in a project – they are not going to listen to a two day presentation, then say lets go for it ! They will go away and research a project for a long time, look at the figures, and long term potential – then before any deal is made they will talk up any potential problem areas – to get a better deal. This is normal business.
Why does the article talk about property prices having gone up 70% since 2002? What relevance does an increase in property prices over the last 13 years have? I would suggest that this is normal in most countries over this period of time – for example in the UK this figure is 98.21%. I dislike these overall property price figures that are given out, as they distort individual areas and situations – for example London has seen an increase of 136.89%. Here in Cyprus we are often given overall price drops over the last few years – however there will be a big difference between a nice villa in Coral Bay with Title Deeds, and a two bedroom apartment on a large complex in Paphos, with no Title Deeds.
These International Investors will be looking at the long term prospects for property and investments in Cyprus and will be far more interested in seeing these repossession laws passed into parliament, which will help stabilise the economy and the banks. Secondly more progress with Title Deeds which will boost property sales and prices.
Despite what many commentators on this site say, property prices are cheap compared to the UK (easy in Cyprus to find a 3 bedroom detached villa with pool, and good views for £ 200,000) but most buyers are looking for Title Deeds.
Cyprus has great potential for private and large International Investors – it just takes commitment from the Government and the opposition to take advantage of this.
This comment made me laugh.
The highly skilled workforce and the high quality of service.
There is very little in Cyprus that is regulated. No health and safety on site. Some of the things I have seen when driving past these sites would have the place shut down in the UK. There are no apprenticeship schemes in place so all the plumbers etc. have had the skills passed down to them. The gas (LPG) side of things is scary. I am a registered installer in the UK but anybody in Cyprus can work on gas installations. When I had my gas hob installed it was connected with a rubber hose which ran through the units to a bottle outside. this guy also repaired flat roofs, decorating, tiling, pool maintenance and groundworks. When I asked how they were going to test the pipe work I was told that they don’t have anything to test it with. As far as I can see the whole of the building trade is totally unregulated without any apprentice trained operatives. I may be wrong.
As much as any development is to be welcomed (as long as it is necessary, required, controlled, within environmental considerations and landscaped)we perhaps should consider upgrading and modernising our existing stocks of properties, land, roads and rural paths. Extending water, sewerage and tarmaced roads to rural areas would benefit the country’s infrastructure and population.
…..”Based on official ECB data, residential property prices have dropped 29% since 2008 but still are 70% above 2002 prices”…..this statement sums up exactly the point I have been making for years. Vastly overpriced properties with asking prices resembling telephone numbers with a quality and structural integrity as low as is almost possible to get but glossed over with a final finish coat and paint job hiding all the defects. We need to get realistic and charge a fair to good price for the product on offer. No one who has bought at the peak will agree with that but sadly that is the fact. This is not Monaco, we need to look around us at the graffiti, piles of builders rubble, abandoned gridges and cars – it don’t happen in Monte Carlo.
My house was built by the quote “highly skilled workforce” with the quote “High quality of service”.
To use another quote from Huckleberry Finn “Just you saying it’s so, don’t make it so”.
And I was not alone. The snags list (he didn’t like the expression “defects”) went on and on until the developer decided things like the leaking roof were my fault and just walked away.
Now that is “High quality service”
It is no wonder nothing is selling, I was last in Cyprus in February 2014 and looked at a villa in Ayia Thekla that had been sitting empty by the look of it for a long time and they were still wanting top price of when property was selling for top price years back. Until people get realistic on the prices nobody will buy.