THE collapse in property sales is continuing despite price cuts and government legislation introduced last year designed to provide additional protection to consumers.
With unemployment spiralling out of control and the tightening of lending criteria by the banks, very few people have access to the funds required to purchase a property.
The general uncertainty in the Island’s economic future is also depressing local demand.
The banks are in a pitiful state and the government has said that it is ready and willing to bail them out should it become necessary. Such a move could place such an unbearable strain on the government’s resources that it may have to apply to the European Financial Stability Facility (EFSF) for a loan.
The collapse in sales also reduces taxes flowing into the government’s coffers. According to calculations carried out by the director of the Land Registry, Andreas Christodoulou, state revenues will be lower by 25%-30%. “Lower Land Registry Revenues will affect the general state revenues in 2012 as well”, he said.
During April, a total of 461 contracts for the purchase of property were deposited at Land Registry offices across the Island compared with 542 in April 2011; a fall of nearly 15% – and a drop of more than 70% on the 1,556 contracts deposited in April during the boom year of 2007.
Of the 461 contracts deposited in April, 119 (26%) were in favour of overseas buyers.
With the exception of Paphos, where there was a slight increase in the number of properties sold last month compared with April 2011, sales were down in all districts. Overall, a total of 342 contracts were deposited compared with the 391 deposited in April 2011; a fall of 13%.
Overseas property sales
With the exception of Limassol, where there was a slight increase in the number of properties sold last month compared with April 2011, sales were down in all districts. Overall, a total of 119 contracts were deposited compared with the 151 deposited in April 2011; a fall of 21%.
The government still has much to do to repair the Island’s tarnished reputation abroad resulting from the on-going delays in issuing Title Deeds and the actions of unscrupulous property developers.