PROPERTY sales in Cyprus slumped to a record low during August to a level last seen in early 2009, increasing fears that the recovery in the market seen throughout the first half of the year was short-lived.
For a second consecutive month, property sales have fallen even though prices have been dropping. Property developers and estate agents are concerned over the fall and some predict a further deterioration in the market.
According to the latest figures from the Department of Lands and Surveys, the number of property sale contracts deposited at Land Registries throughout Cyprus during August was 554 compared to the 797 deposited during July 2010 and the 642 in August 2009.
The annual drop in sales during August was 14%; 2% lower than the 12% fall in July.
With the exception of Famagusta, sales fell in all areas. The largest fall (43%) was in Larnaca where sales fell from 135 in August 2009 to just 77. In Nicosia, sales fell by nearly 18% from 173 to 142. In Limassol they fell by 2% and in Paphos by 1.6%.
Although sales have increased by 12% this year, from 5,135 during the first eight months of 2009 to 5,759 during the same period in 2010, some in the industry believe that the slowdown in July and August is ominous.
Worse days to come
According to Stockwatch, most real estate agents are pessimistic for the course of the market, while others believe that it will stabilize.
According to the Chairman of the Pancyprian Association of Real Estate Agents, Solomon Kourouklides, the Land Registry figures confirm their initial forecasts. “The increase in the first months of the year was a coincidence due to the sharp increase in offers. Now the market goes down since we have run out of offers”, he added.
“Last year’s high basis contributed significantly to the August decline”, Business Development Director of Aristo Developers, Iros Miltiadous stressed.
“The market should have shown an increase. We expect to see the course of the market in the next few months”, former District Land Registry officer and real estate agent with Danos & Partners, Panayiotis Argyrou said.
“The figures show stabilization in all cities but Larnaca, where the decline is alarming since there is no reason explaining it”, real estate agent, Antonis Loizou said.
“In the next few months, things will deteriorate further since the economic parameters do not get better. On the one hand, the interest rates are kept high and on the other the cost of living increases. The failure to take a political decision for economic measure contributes negatively too”, Mr. Kourouklides said.
“Until 2011, the property market will go through difficult days”, Chairman of the Pancyprian Association of Land Developers, Lakis Tofarides noted.
“2010 is a difficult year despite the drop in prices”, Mr. Loizou emphasized.
Having just come back from Cyprus I was amazed at the number of unsold properties on the market. It is five years since my last visit and the situation is visibly different. Row on row of unsold new builds let alone the stagnation in the resale market.
Prices are over-inflated and anyone with any sense will not buy at the moment. There has to be a levelling down of prices.How can the huge loan debt on property be sustainable if little is moving in the market? As for the title deeds scandal this just adds to the stagnation.
Rough justice will be a collapse in the market then the Gov’t will have to move. Let’s hope.
Worse days to come?
You bet ya, it is.
The Government don’t deserve the income until they clean up their act, and that won’t happen until they need the money, and by then Cyprus’s image abroad will be shot.
It’s a bit premature to talk about slump. There is always a considerable decrease in August as compared to July (look at 2008 figures – it was even greater). We need to see September figures first. They will be less distorted by seasonality.
I agree with the other comments, but what makes you think no Title Deeds no sale will improve the situation?. They will look for and find new ways to rob us. Posting comments here is all very well and it gets it off our chests and relieves our brains. Great ! but now is the time to do some thing. When they are down they are weak and more vulnerable. So write to your Cyprus, your Cyprus Euro, your British, and your Euro MPs.
Contact the local press where you were based or still are based in the UK tell them your horror story so as to warn other potential victims in the local press and why not radio stations TV . It,s no good moaning we have got to do some thing NOW !.
What does it take for the government to realise that property buyers will not return until title deeds are available at point of sale.
There are plenty of other countries to choose from, where you can safely purchase property.
My advice is, never purchase a property in Cyprus unless the title deeds are available up front.
I think the slight upward trend in Famagusta is due to Nicosians taking advantage of distressed sales and buying holiday homes.