Cyprus Property News magazine for overseas buyers & real estate investors

Thursday 9th July 2020
Home News Cyprus market at risk from unsold houses

Cyprus market at risk from unsold houses

THE SHARP drop in the demand for property in Cyprus has pushed the number of unsold apartments and houses up considerably, with some developers now offering discounts of up to 30% fearing that the situation will worsen in the coming months.

In the first half of the year, developers tried to attract buyers with gifts such as free air-conditioning etc. In the second half, they couldn’t bear the pressure of the economic crisis and decided to cut property prices“, Chairman of Real Estate Agents’ Association, Solomon Kourouklides told StockWatch.

Some believe that big discounts are being offered in the expectation that the situation will worsen after September, when the problems in the tourist sector will be reflected in the Cyprus property market. According to Antonis Loizou “The property market will sink to the bottom after September. Areas such as free Famagusta, Avgorou, Dasaki Achnas, Xylofagou, Tersefanou and the seaside areas of Paphos might be under strong pressures“.

According to Loizou, the drop in prices is mainly attributable to the low demand and developers’ attempts to pay the cancellation debts of many buyers – mostly British – who cannot pay their debts and return their purchases.

Cybarco sales representative, Alexandros Sinka, explained that the large number of unsold apartments and houses are a financial burden for developers due to their cost of maintenance. “As time goes by and there is a large number of unsold apartments and houses, the chances of them being sold are minimized due to their wear and tear“.

Sinka also linked the discounts to the strategy that developers adopt to increase the Company’s capital adequacy during the tough economic crisis.

Property valuator, Haris Timotheou from Danos Consultants and Valuators, stressed that this period is a knife that cuts both ways for the developers.

On the one hand, the land developers try to minimize the loss from the market freezing and push prices down, while on the other they have a significant number of indisposed properties that if they remain unsold, they will be loss-making for themselves“, he said.

Mr. Timotheou agreed that the problem affects the coastal areas such as Protaras, Pissouri and Paphos. However, he believes that city and town areas will also be at risk if the property market fails to recover soon.

Chairman of Land Developers’ Association, Lakis Tofarides wondered how developers can offer 30% discounts without giving the impression that prices formerly were unjustifiably high.

The base cost of the developers’ materials does not allow such discounts. Only in specialized cases such as tourist areas like Paphos, Protaras and Tersefanou, where houses of 100 sq. meters were built for non-Cypriots exclusively, justify such discounts.”

There is a general acknowledgement that these discounts indicate a significant decline in prices being offered, which may signal further discounts. Chairman of the Valuators’ Association, Charalambos Petrides agreed that prices of non-competitive properties have declined by up to 30%. He clarified by saying that even though prices remain stable in Nicosia and Limassol, prices of properties of secondary importance have fallen by 5%.

Mr. Kourouklides anticipates that property prices will continue to be under pressure in the second half of the year, while this decline might expand to cities.

WEATHER FORECAST

EXCHANGE RATES

EUR - Euro Member Countries
GBP
1.1123
RUB
0.0124
CNY
0.1261
CHF
0.9401

TOP STORIES

Corrupt lawyers continue to plunder estates

Corrupt lawyersin Cyprus continue to plunder the estates of their deceased clients by calculating their fees for administering estates on the Cyprus Bar Association's 'Minimum Fee Regulations', which were abolished in 2018

Cyprus house price index up 2.5 per cent

The Cyprus house price index rose by an average of 2.5 per cent in the first quarter of 2020 compared to the previous quarter according to official figures from the Cyprus Statistical Service (CYSTAT)

MPs commit to expedite citizenship bills

MPs have committed to expediting the bills and regulations aimed at improving the transparency of the citizenship-by-investment programme, so that the items can be voted on before the House breaks for the summer recess.

Decision soon on Pissouri homes devastated by landslide

The government said Monday it will soon have in hand the recommendations of experts concerning the landslide in the area of Pissouri, which has seriously damaged dozens of properties throughout the years.