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Chinese buyers scammed

Several dozen Chinese families buying property Cyprus have reported being scammed by unlicensed real estate agents who take advantage of foreign buyers according to Marinos Kynegirou.

Chinese buyers scammedTHE CHAIRMAN of the Cyprus Real Estate Agents’ Association, said that non-licenced property mediators helped sell properties in Cyprus at excessive prices to foreign buyers, threatening the recovery of the property market.

“There are some crafty, unlawful real estate agents who take advantage of foreign buyers,” Marinos Kynegirou said in a telephone interview on Friday. “They inflate prices of some properties worth only €200,000, to €300,000 to take advantage of the increased interest for real property in Cyprus”.

The association’s chairman said that “several dozen” mainly Chinese property buyers already fell victim to people who act as real estate agents while in reality they are not registered at the Real Estate Registration Council, which tests the suitability of candidate real estate agents in written exams.

Kynegirou added that while some of the alleged victims filed complaints, because of the size of China’s population, estimated at almost 1.4 billion, the cases reported did not “dramatically” affect demand for property in Cyprus.

Chinese property buyers, together with Russians and citizens of Arab countries are one of the main categories of foreign property buyers in Cyprus, he said. While the vast majority of foreign buyers focus on residential property, there is a small number who bought hotels, he added.

The reputation of Cyprus’ property market suffered in recent years because of laws which made impossible for buyers to get a title deed for properties they paid for if the developer who sold it was insolvent. The Cypriot parliament passed a law in September to address this issue.

In 2015, the number of properties bought by non-Cypriots rose 46 per cent to 646 compared to 2014, which is 13 per cent of last year’s total property transactions, according to the latest official figures. Demand for Cypriot property by third-country nationals increased as a result of incentives offered to buyers, which include tax breaks and a speedy issue of a residence permit for buys worth over €300,000. Third-country nationals can also apply for a Cypriot passport after investing more than €2.5m.

Kynegirou added that the property market would stabilise further in 2016 after prices, which are currently “attractive,” showed the first tentative signs of stabilisation. “This year will be better than 2015,” he said, adding that the turbulence at the Chinese financial markets and the drop in revenue from the sale of oil in Arab countries and Russia would not affect demand for Cyprus.

“China and Russia have so many millions in population and it only takes a small fraction of their population to cause an increase in property sales,” he said. “Crises in these countries do not play any role when we are talking about several dozen transactions (in Cyprus)”.

The chairman of the real estate agents’ association said that while construction activity picked up in the second half of 2015, there was still considerable property stock available for sale.

According to the latest Central Bank of Cyprus figures, the value of non-performing loans extended for construction and real estate purposes stood in September at €5.1bn and €2.4bn, accounting for 78 per cent and 55 per cent of the respective categories. More than one in four non-performing loans in the Cypriot banking system is related to construction and real estate.

Editor’s comment

Please see a related story Developers warned over Chinese market

Readers' comments

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  • Terry Evans says:

    Hi There.
    Could you tell us what is The position regarding Paphos Marina at present has Construction started as mentioned a while back or what date it is due to start.
    Thank You.
    Terry E.

    (Editor’s comment: Latest news at Green light for Paphos marina. To find latest news on any topic please use the search box in the white menu.) If you wish to receive news updates, please register to receive my weekly newsletter.

  • Aggis Demetriou says:

    Mr Kynegirou has his head stuck up his back side! Licensed agents charge us 5% plus vat to sell a house when the governing body say they should charge 3% plus vat, the 5% is a separate agreement between agent and seller. So who’s being scammed here?

    I find it very strange and quick of the mark to blame unlicensed agents for the scamming of Chinese when even the licensed agents are doing the same, the story has it that these agents have to retain another agent in China for the tune of 15% +,

    As they say buyer beware!

  • Peter Davis says:

    Maybe if the expat was given a vote in General Elections the standard across the Island may improve in so many areas.

    I don’t have cousins to think of and the unions vote doesn’t bother me either.

    Maybe we can contribute more to the Island than just cash?

  • Tearing my hair out says:

    Someone recently suggested opening up competition to all residents of Cyprus (not just cousins of the natives).

    This should be forced on the Republic by the E.U – and hence all nations living on the island should be able to have a crack at offering services to overseas buyers – not just Cypriots.

    A bit of healthy competition would raise all standards.

  • Steve says:

    Mr Kynegirou did not give any concrete examples, with names, of the unregistered unlawful agents, who were fleecing buyers, which would have made the story more believable and helped to dismiss the temptation to conclude that he is whining because his own members occasionally miss out on big commissions.

    Actually, I would not be surprised to learn that the majority of agents doing the fleecing were registered lawful agents, who use the tactic of asking sellers what they want for the property and then selling for a substantial amount above that figure and pocketing the difference, usually by offering free legal services by a solicitor who is involved in the scam. There were some examples of this practice long before the Chinese were attracted to Cyprus by the offer of a residence permit, which actually defines the ‘killing ground’ for these transactions as being properties worth much less than €300,000, but then unless the price is elevated to that figure the Chinese will not be interested, because the residence permit is the underlying reason for the property purchase.

    Finally, someone should say it so it might as well be me. Cyprus is not a kindergarten and property owners are entitled to get as much from their property sale as they can without resorting to fraud and deceit. What an individual property is worth is what someone is willing to pay for it and buyers often (but not always) have themselves to blame if they pay over the odds. For example, being given a ‘free’ holiday for property buying, can, like buying timeshare, turn out to be very expensive, because of being tied to one developer and subjected to heavy sales pressure. When I finally came (self-financed visit) to Cyprus to buy in 2004 after visiting the island over almost 20 years, I was offered a resale by an agent working for a major developer, only to be enlightened by one of his colleagues, who whispered in my ear the much lower figure the company agents were briefed to sell at, but only so I might buy instead the property he was offering.

  • Peter Davis says:

    Editors comments below……

    Yes it is true that none Cypriots are excluded from the role of Real Estate Agents. I raised an objection about this in 2006, nearly nine years ago.

    Some of the requirements were unbelievable, for instance being able to speak Greek or Turkish, not being allowed to use an interpreter, notwithstanding that most contracts were written in English.

    The examination to hold a licence as a Real Estate Agent are still only given in those two languages.

    But, I warn you things will change when Cyprus joins the EU. The EU will not accept discrimination.

  • Whirlybird Rtd says:

    De Ja Vue. Indeed, I wonder if any of these unscrupulous agents have been in business before under another company name?

    (Editor’s comment: There is an insidious system here whereby it is exceedingly difficult (impossible) for non-Cypriots to obtain a Real Estate Agent’s licence. If you check the membership list of the Cyprus Real Estate Agents’ Association, you will not find a single member with a ‘foreign’ name.

    Non-Cypriots wishing to practice their profession legally are forced to operate as an associate of a registered agent, many of whom charge a fat fee for enabling them to do so.)

  • Steve R says:

    First the English, Irish and Scots. Now the Chinese and Russians. At least this time its only a few dozen not a few thousand so the word must be getting about.

    We have some friends who sold their Villa through a mediator to a Chinese couple. They sold for €325K and agreed to rent it back for an indefinite period. The house wasn’t worth anywhere near that figure. Probably about €100K less.

    How can the crooked local estate agents complain when they have already scammed thousands of people them self.

    Only in Cyprus !!!!!!

  • Mike says:

    Property buyers being scammed in Cyprus? whatever next! I just can’t believe it. As for the non issue of title inferring to be limited to developers who were insolvent – well that did make me chuckle, who are these idiots trying to kid or do they just not live on the island and not understand exactly what goes on. At least we are consistent, consistently contemptible.

  • MartynG says:

    Why are we not surprised at the first and final paragraphs of the above?

    Many of us had prophesied that unscrupulous agents and ‘sorcerers’ would do exactly what they have clearly now done with many innocent Chinese buyers – creating yet further dents,c it seems, in the reliability and trustworthiness of buying properties on the island.

    And the stats re NPLs reinforce that, still, the banks, lawyers and regulators (are there of the latter?) are not tackling the accumulated Title problems : the developers not repaying loans, many, it seems, not even paying accrued and ongoing interest on these historical loans.

    After the events of 2013 in Cyprus you might reasonably think the Cyprus government would have taken positive action to cleanse and restructure, re-regulate the outrages of the past. Not much evidence yet that they, the banks, the Law Enforcers and many professionals are still not ready to Sort these problems, once and for all.

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