Property is a major contributor to the Cyprus economy. The Cyprus Land and Developers Association reported that the Cyprus construction industry has an annual turnover of EUR 1.73 billion. Revenues from property sales to non-Cypriots contribute some EUR 1.21 billion per annum of foreign exchange to the economy of the island.
However, this revenue and the islands’ financial well being are under threat. As many buyers (both expatriate and Cypriot) have found to their cost, buying property in Cyprus can be a risky business. For some, their dreams of owning property have turned into expensive nightmares.
There are many problems. Bureaucratic delays and other impediments result in Title Deeds taking ten, twenty, or even thirty years to be issued; planning and building applications can take two years or even longer to process. (If you missed Channel 4’s damning documentary about the Title Deed problems affecting thousands of Brits who have bought property in Cyprus, watch an 8 minute clip below.)
Unscrupulous property developers prey on unsuspecting property buyers. They build without planning and building permits, they sell property that is mortgaged, they introduce buyers to their friends in the legal profession who draw up contracts that give buyers little protection. They demand payment for work that hasn’t been done, and they extort money from buyers using the threat of withholding Title Deeds to elicit payment. They even take loans on property that they have sold and which buyers have paid for in full. Due to outstanding loans on property, planning irregularities and unscrupulous individuals and companies that exploit the system to maximise their income, some buyers may never receive the Deeds to their property.
Developers threaten violence and, in a case currently under Police investigation, two of them allegedly assaulted a British property buyer. So severe was the brutal beating dished out by these louts that the buyer, Conor O’Dwyer, spent several days in hospital recovering from his ordeal.
Cyprus is not isolated from the rest of the world; it cannot hide these failings or try to bury its head in the sand. Foreign media companies are showing an interest in the property issues. Research teams from BBC, ITV and Channel 4 have visited the island and have interviewed dissatisfied property buyers.
Reports from irate buyers are appearing in the foreign media and on the Internet. The British High Commission receives around 100 property-related queries per month. Many British nationals with property problems also write to their Member of Parliament or their Member of the European Parliament. A recently published book condemning the Cyprus property industry is widely available in British bookstores and can be obtained world-wide through Amazon and other multi-national organisations. Such reports and books tarnish the image and reputation of Cyprus.
The future of the Cyprus property industry has reached a crossroads. Unless Government acts quickly to remedy the situation, the damage caused to Cyprus’ good name and reputation could have far-reaching consequences. The financial repercussions resulting from the drop in foreign revenues from property sales and tourism could be catastrophic for the Cyprus economy.