ACCORDING to a report in today’s Cyprus Mail, there has been a significant slump in sales of property in the coastal areas of the island. The worst hit areas are Paphos, Paralimni and Protaras although Limassol and Larnaca are also feeling the effect.
Property sales in coastal areas have dropped up to 40 per cent as a result of flagging demand from foreign buyers, though prices are generally stable, estate agents said yesterday.
“There is a big decrease in demand, especially from outside and especially from the British market, who are our traditional customers,” said Solon Kourouklides, chairman of real estate agents.
Speaking on state radio CyBC, Kourouklides said the coastal areas of Paralimni and Protaras were experiencing a 40 per cent drop in demand, as was Paphos, while Limassol and Larnaca have seen a 25 to 27 per cent fall.
The Capital Nicosia only has a five per cent share in property demand from foreigners so any drop there was due to declining domestic demand, Kourouklides said.
“Regarding prices, generally speaking they are stable with one exception – coastal areas where there are organised projects specially targeting foreigners,” he said.
To attract customers, developers there do not charge VAT, or give away for free furniture, domestic appliances, or air-conditioning and central heating systems.
Kourouklides said many developers were having cash flow problems and could not secure bank loans to finish their projects because banks were asking them to cover a high percentage of the total cost.
“In many cases, they ask for 50 per cent.”
Banks are also demanding a 40 per cent deposit from foreign buyers now, whereas it used to be between 20 and 30 per cent.
Many deals have been cancelled due to the lack of cash flow, Kourouklides said.
He warned that there would be great pressure on property prices if the cash flow problem persisted in the New Year and banks asked for high percentages.
Copyright © Cyprus Mail 2008