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On-going collapse in Cyprus property sales

The number of properties sold in Cyprus continued to fall in August dropping 16 per cent compared with August 2012 according to figures published by the Department of Lands and Surveys.

LACK of liquidity and financing together with the on-going problems in the island’s economy and the construction and property sectors contributed to the continuing collapse of property sales in Cyprus.

Latest figures from the Department of Lands and Surveys show that a total of 266 contracts of sale were deposited at Land Registry offices across Cyprus in August 2013 compared with the 316 deposited in August last year; an annual decline of 16%.

Of those 266 contracts, 79% (210) were deposited on behalf of domestic buyers, while 21% (56) were deposited in favour of overseas buyers.

With the exception of Nicosia and Paphos, where sales increased by 27% and 4% respectively, sales were down in all other districts.

Property sales in Famagusta fell to 23 from the 40 recorded in August 2012 (-43%), while sales in Larnaca fell to 40 from 62 (-36%) and those in Limassol fell to 57 from 84 last year (-32%).

total property sales aug 2013

During the first eight months of 2013, overall sales are down 46% compared to the same period last year having fallen from 4,434 to 2,399.

Some pundits expect that property prices will fall 30% in the coming years as a result of the lack of liquidity and the banks not granting loans, while the Economics Research Centre of the University of Cyprus says that: “Recession in the Cyprus economy is forecasted to deepen in the remaining of 2013 and in the first quarter of 2014. Subsequently real GDP growth is also projected to contract but at smaller rates” in its latest report.

Domestic sales

Domestic sales during August were down 10% compared with August last year.

Although sales in Nicosia and Paphos increased by 29% and 9% respectively, the number of properties sold in Limassol, Larnaca and Famagusta continued to fall.

Sales in Limassol fell to 37 from 61 recorded in August last year (-39%), while sales in Larnaca fell to 32 from 45 (-30%) and those in Famagusta fell to 23 from 25 last year (-8%).

domestic property sales aug 2013

During the first eight months of 2013, domestic sales have fallen 50% compared to the same period last year having dropped from 3,481 to 1,739.

Overseas sales

August was another disastrous month for overseas sales with the number of properties sold dropping to 56 compared with the 84 sold in August last year; a fall of 33%.

With the exception of Nicosia, where 7 properties were sold during August compared with 6 in August last year – an increase of 17%, sales continued to fall in all other districts.

Zero properties were sold in Famagusta compared with the 15 sold in August last year. Meanwhile sales in Larnaca fell to 8 from 17 last year (-53%), those in Limassol fell to 20 from 23 (-13%) and sales in Paphos fell to 21 from 23 (-9%) in August last year.

overseas property sales aug 2013

During the first eight months of 2013, property sales to the overseas market have fallen 31% compared to the same period last year having dropped from 953 to 660.

Readers' comments

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  • Phil says:

    @Nigel

    Thanks for your response, needless to say that I recall a conversation that I had with an employee of the land registry who told me “that the failure of those who do not register their contract of sale (COS) are breaking the Law (I tried hard not to laugh at this stage). It would be to their advantage to register the COS as when it comes to the payment of transfer Tax they will pay on the value of the property as per the (Registered) COS. If they failed to register then it will be on the current value to date”. Makes sense

    A friend of ours, approx a couple of years ago paid their property transfer tax. He being astute had worked out prior to the visit how much to expect to pay and he was right on the nail, No more no less and there was never any mention that his property had increased in value since the registration of his COS, so they must have used it for their calculation.

    So who is right here, what is the point of registering a COS (No taxes at this stage)

    Ok, so lets look at it another way, Purchasers would normally have budget when making their purchase and set aside the amount of Tax they would be required to pay on transfer of Title careful to register COS.

    Now many many years latter, not of their making or failings up pops Mr developer and wants to transfer title (IPT bearing down on him).

    So you, much to joy, soon to be saddened, find that you must have not budget correctly because now the Land Registry want a lot lot lot more tax which you ain’t got. Why because apparently they are not interested in your COS and use their own property value. Another failing to add to the long list, not being advised correctly with ref to property transfer Tax.

    I just had a thought, Cyprus was, but not out to public knowledge, government in denial and no Troika financially broke when my friend paid his property transfer tax. So is this some new Land Registry policy, official or not (screwing the customer on tax for as much as you can) knowing that they are desperate to get hold of their title deeds and won’t challenge it for that same reason. Just a thought!!!

    Phil

  • @Phil – The Land Registry uses what it believes is the market value of a property when assessing Property Transfer Fees.

    This market value is never lower than the price paid and very often higher!!

    Take a look at Is a property only worth what someone will pay for it?

    I get many complaints from people who have been overcharged.

  • Bob Bate says:

    It appears that greed will continue to be the dominant factor in Cyprus’s downfall,

    When will they ever learn ?

    It has been a dream of my wife and I to buy property and retire in Cyprus; would we be foolish to do this even though we are armed with all the do’s and don’ts from our good friend Nigel!

  • Phil says:

    Hi Joan Green.

    It is my understanding, unless the rules have been changed, that when a contract of sale, which states the purchase price, is lodged (Registered) with the Land Registry then that is the official amount that you pay your taxes on when it comes to the transfer of the title deeds, irrespective how many years have gone by.

    Maybe Nigel might like to come in here to give his advice?

    Phil

  • Phil says:

    I’ve rented in Cyprus on and off (having moved away to WA, California and Sri Lanka in the interim) for 20 years and even had my own business here for 2 years. I would have loved to have finally bought here and half heartedly looked in July. One nice renovated village house for Euros 300k and he wouldn’t negotiate despite it being on the market FOUR years and 2 bog standard 2 and 3 bedroom houses on a development in Lania for Euros 165k and 135k. I’ve now just concluded a deal (and got a mortgage) for a stunning 4 bedroom house with TEN acres of producing almond trees and some pine woods 35 minutes inland from Alicante for Euros 125k !!. The excellent (British) agents I used said they’d never been so busy selling houses to foreigners and it was clear that they were. I’d imagine a lot of other foreigners will make the same decision as myself over the next few years which will worsen this crisis.

    I’m afraid I have very little sympathy despite most Cypriots I’ve met being lovely people. “You get the government you vote for” as they say !

  • Robert Briggs says:

    Regarding this ongoing collapse, what has happened to the scores of Chinese buyers who were supposed to be inundating the Cyprus Property Scene?

  • Joan Green says:

    Dear David,

    When my title deeds were ready I went to the land registry with my developer to pay the transfer fees but the land registry told me the value of my property was nearly 50 per cent more than I paid for it in 2008.

    My developer spoke with the clerk and we were taken to see a very nasty woman upstairs. She and my developer started talking in Greek and then they started shouting at each other. Eventually she agreed to reduce the value of my property by 15000 euros which was still a lot more than I paid for it and I paid for my deeds.

    When we left the land registry my developer told me they overcharge everyone and he apologised.

    My developer is very good and I am very happy with my villa and he often calls to see if we have any problems that need fixing. Last year I had a problem with the waste pipe under the kitchen sink and he didn’t charge for fixing it.

  • David says:

    I would not advise my worst enemy to buy a property in Cyprus given the problems with title deeds and all the crooks.

  • Mike says:

    And still 21% of all buyers are from overseas! It beggars belief that we as a species can be so dominant yet so stupid but I guess that is what enables fraud, deceit and apathetic attitudes to customers to flourish.

  • Ivan says:

    The Bank of Cyprus do no encourage overseas investors. They have now made an extra charge of €150 taken directly from their bank account without any notification. I found this charge by chance on a February bank statement.

    It appears it’s a fee charged to anyone that pays money into their account from outside Cyprus! So if you are with a Bank of Cyprus mortgage they are probably charging you 2% p.a over the agreed profit margin, they charge you for every payment you make into your account from abroad and now they charge you an extra €150 once a year on top of that!

    So it appears that it doesn’t matter what you agree with the bank of Cyprus they can alter it all the next day, without any notification or justification, (as stated in their terms and conditions).

    It’s not criminal but it certainly should be, and overcharging those who are paying you is not good for long term business.

    Perhaps prospective purchasers look at all this as indicative of the treatment they are likely to receive and decide it’s safer to buy elsewhere.

  • The views expressed in readers' comments are not necessarily shared by the Cyprus Property News.

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