SPEAKING at the 5th Land Development Conference in Nicosia yesterday, Group Editorial Director of the Overseas Property Professional Magazine, Alex Evans, said that the recession has changed the typical profile of UK buyers of property abroad, driving out the “amateur” speculators in favour of the serious property investor or holiday home buyer.
Nowadays, he said, UK buyers are far more cautious, showing low confidence in developers and off-plan deals and preferring “safe” markets. He added that UK buyers have less equity at their disposal, partly due to the weakness of sterling, and so are looking for higher quality for lower price. Spain is now regarded as Europe’s new “bargain” distressed sales destination.
Evans said that one of the things that Cypriot developers must do to compete in the international property market is to adapt their product to present a regulated and safe purchase process to their target market, addressing issues such as escrow deposits, title-deeds, planning and bank guarantees.
President of the Cyprus Land & Building Developers Association, Lakis Tofarides, told reporters: “The legislation in Cyprus relating to property purchases is very good, and will become even better when the proposed laws are passed”, referring to the five bills designed to help the Title Deeds problem.
On the subject of lower prices, Mr Tofarides said that although property prices have dropped by 10% in urban areas and by 30%-40% in coastal areas, the high cost of land means there is no further room for cutting prices. “Cypriot landowners are not selling their land, whatever form the crisis takes,” he said.
Mr Tofarides warned prospective buyers that in a crisis period they should be careful not to fall into the trap of dealing with a developer who is in financial difficulties. “You should take care to ensure that the sales contract is registered with the Land Registry, you should search for existing mortgages, look out for possible problems”, he said, adding: “Price cannot be the only criterion”.
According to Land Registry figures quoted by one of the conference speakers, the number of registered property transactions fell 32% from the 2007 market peak of 49,191 to 33,232 in 2008. The 2006 total was 40,166.
The number of transactions for the first eight months of 2009 was 11,788; a 52% fall compared to the same period last year.
Sales to foreign buyers have fallen dramatically in 2009. Having grown 32 per cent from 9,633 in 2006 to 12,732 in 2007, they fell 32 per cent to 8,600 last year. If the figures for the first eight months of 2009 were annualised, the 2009 total would be 2,220, representing a 74 per cent fall compared to last year.
Speaking yesterday, Cyprus Interior Minister Neoclis Silikiotis said that the government is “making a huge effort to improve legislation and plug gaps that have formed over decades, in order to fashion a more secure situation regarding Title Deeds in Cyprus.” Adding that the target is to have the bills approved by the House of Representatives “before the end of the year”.