FOR years now and especially during 2006 and 2007, the government earned significant revenues from the property sector, a fact that constituted an important boost to public finances. Of course, the current government aspires to similar or better revenues in the future.
This of course leads to a few legitimate questions: What measures has the Cyprus government put into place to have the necessary foundations for this revenue in the future?
How did it help the players of the sector (developers, buyers) to engage in new transactions? Any reasonable person could wonder:
What should the government have done – that it has not?
We believe that it could have done more; it could have taken measures that would have given the sector and the economy as a whole, a boost.
And because we do not simply like to criticize, we will list below some of the measures that could, have been taken.
The first and most important is the one related to the issuing of title deeds. This is a measure that affects foreign and local buyers and would surely appease the interested parties and help the sector tremendously.
The issue is perpetuated and remains a basic obstacle to the growth of the property sector. (There are five complicated bills under discussion in the House of Representatives that, even if passed in their present form, will still not resolve the problem within a reasonable timeframe).
We are in a crisis period and buyers are confused and are not buying. What incentives has the government granted so that the potential buyers would buy their property today and not in five years time?
Why didn’t they reduce transfer fees at least where VAT is applicable? Why haven’t they given the sellers an incentive by decreasing the percentage of capital gains tax from 20% to 10%, for one year, so that they can decrease prices?
Many developers are finding themselves in a difficult financial position. Many have projects they cannot finish. The government could help by granting loans with a lower interest rate so that the projects can be completed and not appear to be abandoned giving the Cyprus real estate market a terrible image.
Following the lack of interest from the traditional English market, what did the government do to promote holiday homes to other foreign markets and to attract new buyers?
Not only did they not do anything, the relevant governmental services, such as our embassies, for example, with the way that they function create serious problems by not giving timely entry visas to non-European Union citizens and substantially neutralize the efforts that developers make spending large sums of money on advertising abroad.
The above-mentioned are some of the measures that could be taken immediately by the government, in order to help the real estate sector.
Despite the fact that the measures were not taken, we dare to say that it is never too late. The government can easily, even at this late stage, take measures, that will create movement in the market and will also help the property sector. The sooner the better of course.
George Mouskides is the President of the Cyprus Association for the Promotion of Property Development and Manager, FOX Smart Estate Agency.
@Denton. The Banks are integral to these situations and you are absolutely right. None of us are safe.
In answer to your second paragraph all you have to do is scroll down below Paul.
This is what is very concerning about Cyprus–Mis and Dis information not to mention blatant lies and censorship. Here we have a published article by, if you had no proof otherwise, a man of the people or is Fox just feeling the affects of the truth coming out and the reach of the internet on their pocket. I may be wrong but I do not think so.
Another bad day!
What is so often neatly ignored by ‘the industry’ in the Title Deeds issue is the fact that no matter how ‘brilliant’ the developer he can still default on mortgages and go bust. If he does, it is 10 to 1 that the banks will zoom in – and, as the evidence now tells us, the buyers are not protected.
Developers and agents are still failing to tell prospective buyers this uncomfortable fact, in breach of the EU Unfair Commercial Practices Directive 2005/29/EC. Indeed, many are implying if not stating that buying a property without title deeds is ‘safe’. I wonder what Mr Mouskides and Fox do on these matters. Do they make full disclosure of all material facts? I do hope so.
Why should the government help property developers? They surely benefited from the boom years and therefore made large profits throughout this period. Now the boom is over and they are now looking to the government to help them? No way! Let them help themselves! They could start by setting prices at a more realistic level.
When will they realise there is an over-supply of property with little or no demand?
There are large swathes of new, empty properties throughout Cyprus and yet still they continue to build!
They need to get real and not look to government to bail them out!
@ Andrew. I did have a bad day as I have never posted on this site before but I recognised the name of the guy who wrote this article.. What gave me a bad day was that I have an email from the guy who wrote this article dated 20/09/2010 in response to an enquiry about a house and was advised by him that “The absence of title poses no problem”
I think not.
What are you lot on about? There is nothing wrong with the Cyprus property market. It is run by good, honest people: Developers, Estate Agents, fine upstanding members of the community “Lawyers” .
And if look out of the window you will see a flock of pigs flying by. The day they do, will be the day we believe the above.
And while we are waiting for this elusive flock to appear, why not complain to your Euro MP telephone the press back home, talk to a reporter.
Who knows you may get lucky like me and get someone to take an interest.
The government know very well what measures need to be taken to help the property market, they just do not want to take the required steps.
Title deeds must be available, or at least guaranteed to be available within a reasonable timeframe by the government, to every property purchaser.
The problem is, the government is made up of people who have vested interests in not taking these steps, namely lawyers, who make a great deal of money trying to sort out the current mess, developers, who are up to their eyes in debt & politicians who lack the intestinal fortitude to do anything.
In my opinion, meaningful changes will only occur, when the financial pain forces the issue.
Change for the better will happen sooner or later. There is no other solution to the Cyprus property markets continuing demise.
Andrew McC I think you are having a bad day but I agree with you.
Costas Apacket has the answer. Sadly though the Banks are unlikely to relinquish their strangle hold any day soon.
It seems that the whole world reacts when Rooney or Beckham sign or break a contract or get caught with their shorts down . Yet when people are being denied their basic human rights the same world turns a blind eye.
Keep faith in justice because one day it will prevail.
I love your comment Andrew a realist, if a little pessimistic. Those at wrong are being punished by their actions along with investors. I can see it now “what recession ?” as they disappear beneath the waves as the laughing stock of Europe.
We will not because even at our own expense it is quite simply wrong. i concur
Dear George,
Buyers are not buying not because we are in crisis, but because prices have ballooned to inconceivable levels. For an average young couple, purchasing a house has become almost an unachievable dream.
Many of these property developers that you say are in financial difficulty, have become rich on the backs of the average person, by overcharging for the housing the provide. Just have a look around at the Range Rovers and Porsche Cayennes parading the main streets of our towns.
Now you expect that these developers should be assisted by the government for their financial difficulties? With the money of the Cypriot tax payer? Oh the irony.
Prices will need to drop before people start buying again. Unfortunately prices remain overinflated, unreasonably so.
The questions raised about the failures of government in the past will of course continue to be brushed under the carpet.
The Cyprus Government needs to take urgent and positive action. Perhaps this short mantra would help:
“Though no one can go back and make a brand new start, anyone can start now and make a brand new ending”.
So how can one get this across to the powers that be? I wish I knew the answer. The brand new ending could be so good for this beautiful island of Cyprus and for all those that live on it and for those that would like to but dare not take the risk at the present time.
Please feel free to publish the above if you so wish.
So much development still going on, and who is going to buy these million euro apartments off plan. These buyers have money, an hopefully expert independent advisors, and will demand title deeds straight away.
Why not set up a special office to handle these transactions, bypassing the Land Registry office, and use the funds to repay the loans and release some title deeds elsewhere.
Well said Andrew.
Spread the word Cyprus is morally and financially bankrupt. With a total population that would fit into Man United ground only eight times, one section, the builders owe €7b in toxic debts to the banks.
This toxic debt is increasing day by day and it’s based on mortgaging our homes to the bank. Its our homes, the ones for which we have paid in full, and will never own. Rather than bankrupt the builders the bank continue to give more loans or extend existing ones against our homes.
Accounting rules which state that bad debts should be written off after 12 months are ignored. The banks don’t even have a ‘bad debt’ provision in place?
The EU will have to step in and sort out this mess, because it is clear that the Cyprus Government is totally inept. But for many it will be to late, they will have lost their homes.
In the meantime spread the word buy in Cyprus and you will lose your home, our sanity and all hope of even leaving the Island with your capital.
In the meantime can some explain why my taxes are being used to shore up a dysfunctional system that is a ‘bent as a bag of nails’?
@ Andrew McC
Neatly summarised and eloquently stated. Same goes for me. I give your comments five stars: *****.
Just sell houses with legal title deeds registered in the purchasers name at the point of sale.
It’s not nuclear fission or rocket science is it?
More than a few legitimate questions!
No one cares any more George. We victims could not give a stuff about the Cyprus property industry even at the expense of our own homes, as they are not really ours anyway. We might as well bring it all to an end sooner rather than later. That way we may still at least have our health.
Sorry the developers could not buy a new Merc this year and if I have my way I will spread the word about Cyprus for as long as I have breath. Goodbye Cyprus property Industry. We asked them to change but they were greedy fraudsters along with their banker, lawyer and Parliament friends who have helped them out. We victims will continue to spread the word about Cyprus property. Why should we let someone else become another victim? Answer. We will not because even at our own expense it is quite simply wrong. I think you are dreaming George if you think you will recover in 5 years.
I would rather lose my own home than stay silent.