June property sales up 28 per cent

1. @sky – well I hear partly what you say – but I’d make two observations.

   One – the Republic is trying to ‘attract’ Chinese & Middle Eastern investment throwing in citizenship & passports et al. In these cases – they may not all be simple debt 2 asset swaps, but opportunities for fresh investors bringing in new money from outside (of course – leaving that in the hands of the original unscrupulous legacy management is not in all cases helping of course).

   Two – debt is a global problem & I’d need to see where you had sourced your data before being able to comment if Cypriot debt ratios were higher than anywhere else?

2. Thanks for the update below – appreciated.

   My principle concern with restructuring banks balance sheets is all of the banks in the Republic following Hellenic Bank & selling off their debts.

   If the original lenders mis-sold loans – presumably this has to sorted out through the court system before they sell them on? Either that – or whoever the loans get transferred to will have to run the risk they will have bought bad debt that cannot be realised?

   Ed: I would expect that any organisation buying these bad loans will have checked to see whether any court actions were outstanding and that the bad loans were purchased at a discount as some of them will never be repaid.

3. @richard
   For me it’s obvious…Cypriot households owe €1.2 BILLION which they can’t repay…(this amount is just the amount of NPLs, to which one has to add the future NPLs, and the loans made to people who can just barely pay them…).
   Cyprus private debt/GDP ratio is the highest in the WORLD.
   In a nutshell, this means the Cypriot people is BANKRUPTED.
   And though, Cypriots “transactions” still make 3/4 of the market…come on…this is mainly debt to assets swap…obvious..

4. Thanks for sharing – but I feel you are right to call out the fact that an unknown number of these are tied up in loan restructuring or debt-asset swaps.

   Is there any way of ascertaining what percentage of the total amount is? It would help knowing if an actual recovery is progress, or whether it is just ‘fiscal chess’ with property.

   Ed: I did publish some information last month, but I don’t have any authoritative figures:
   
   We know that debt-to-asset swaps will be included in the numbers of domestic sales and although no official figures are available, the Greek language Phileleftheros newspaper published an article this morning (12 June), which reports:

   Of the 535 properties that were put to auction, a mere 20 have been sold.

   The Bank of Cyprus Real Estate Management Unit (REMU) took over property valued at €128 million during the first quarter of 2017 and at the 31st March 2017 had €1.4 billion worth of properties on its books.

   The banks are now looking at different solutions to meet increasing requirements of the supervisory authorities to consolidate their balance sheets.

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