REAL ESTATE agents were warned yesterday that “appalling practices” of the past have damaged Cyprus’ reputation while similar unprofessional behaviour in the real estate sector today is threatening to destroy the emerging and promising Chinese market.
The message was delivered by Interior Minister Socrates Hasikos and general secretary of the Chamber of Commerce and Industry (KEVE) Marios Tsiakkis at the annual general meeting of the real estate agents association (SKEK) in Nicosia yesterday.
In his address, Tsiakkis highlighted the recent interest in Cyprus real estate from the Chinese market and called on everyone to handle the new opportunity responsibly and prudently.
“I want to take this opportunity to draw your attention to a number of complaints that have already been reported to us about unprofessional behaviour by Cypriot property sellers to Chinese buyers and call on you to give this issue the proper attention,” he said.
“As a country, and you as an industry, we cannot afford to let a small group of non-professionals destroy – at the altar of easy money – an emerging and very promising market which if handled correctly and responsibly can act as a powerful injection for the suffering Cypriot economy.”
Tsiakkis called on the government to take new measures to boost the property market.
“The imposition of new taxes on immoveable property, without curbing non-productive state spending, does not contribute to raising state revenue, or to growth of the economy. These times we are living require more sophisticated approaches to exit the crisis and return to growth,” he said.
He also noted that the real estate sector was the most affected by the crisis as reflected in the property sales recorded in all districts.
Unfortunately, the impact of the economic crisis, the overheated property sector, current banking problems, and lack of liquidity in the market have brought the sector to its knees, he said.
Also addressing the AGM, Hasikos said despite the protracted crisis, Cyprus continues to offer a consistently high and favourable business environment and an excellent network of services that make it an important financial and business centre of the Eastern Mediterranean.
“However, I must underline that unfortunately the good reputation of Cyprus as a destination for investment in real estate has been adversely affected in recent years by the appalling practices of people and businesses, which in many cases exposed the Republic to foreign investors,” he said.
Hasikos called on the real estate association to work both domestically and abroad to restore the name of the Cypriot market.
Outlining government plans for the ailing sector, the minister said his ministry was focused on “promoting radical solutions to the problems facing the sector to give a real boost to growth in the country”.
He expressed hope that significant changes to the real estate and town planning laws “will fundamentally solve the ailments of the past, not only to protect and enshrine property buyers but also to help restore the good name of the Cyprus real estate market abroad”.
Some of the changes required by the memorandum signed with the troika include: the re-evaluation of property values at today’s prices; compulsory registration of contracts of sale within six months of their conclusion; access of the banking sector to the digital archives of the Land Registry; and accelerated procedures for issuing title deeds so that pending title deeds by the end of 2014 are not more than 2,000.
“Our goal is to implement our commitments within the agreed time scales, which are pressing and demanding,” he said.
He expressed the government’s determination to succeed as future loan disbursements depend on it, but also because it considers implementation of the new measures will help rationalise the functioning of the real estate sector.
SKEK chairman Angelos Georgiou warned that certain legal amendments parliament keeps passing are worsening the situation in the real estate market.
Addressing Hasikos, he said the decision to revise the criteria for fast-tracking residence permits for foreign investors in Cyprus has upset the industry, turning things on their head.
As a result, the arrival of Chinese investors in Cyprus has seen a sharp decline, he argued.
Ed comment
Once in the top three locations for British retirees and overseas investors seeking a place in the sun, Cyprus’ fall from grace was sudden and dramatic – precipitated by an investigative TV report by Andrew Winter (below) broadcast throughout the UK on Channel 4 in late 2007.
Here are a few quotes from Andrew Winter taken from his report:
“There are massive problems in Cyprus with Developers abusing property law to make huge profits for themselves…”
“…this cockeyed legal system allows unscrupulous solicitors and greedy developers to get away with fleecing unwitting house buyers”
Very little has changed since the report was broadcast with the Title Deed-cum-fraud mess together with the actions of nefarious property developers in collusion with estate agents, lawyers and bankers continuing to decimate the overseas property market and blacken the island’s reputation.
Will the developers, estate agents and their chums in the legal profession and banking ever learn from their past misdemeanours? Will the Cyprus government enact and enforce effective legislation to protect buyers from the ‘crooks’ and ‘charlatans’ or is Cyprus destined to become a permanent ‘no go area’ for property investors?
I don’t believe any amount of reforms or promises will make any difference to the housing market here in Cyprus until such time previous abused purchasers are dealt with. I alone are responsible for many failed sales as I tell everybody I meet, the truth here and will continue to do so until previous scams have been rectified.
Peter Davis
I remember the incident well. The police even forced a protester to remove his banner because they felt the wording might offend the sensibilities of comrade Toff.
Peter Davis, Oct 1st 4.20pm.
Whilst agreeing entirely with the thrust of your comment, and without wishing to be pedantic, I too was present at Peyia on the evening to which you refer.
The event was in fact the opening of the new Peyia Municipal Park. Although I am not a Peyia resident, I took part in the demo, and was not surprised when the President failed to show. It was the first indication I saw of his true lack of character.
CPAG has since done sterling and untiring work in assisting those who have fallen victim to the malpractices of the Cyprus property system, and is helping many through the ECHR.
It has also single-handedly caused Cyprus to be taken to task over its non-compliance with the Unfair Commercial Practices Directive. This is no mean feat given the snake-like writhings of the Cypriot “defence” of this gross malpractice.
I take my hat off to CPAG, and also to Nigel’s untiring reporting of all the relevant news.
I agree Peter, that a big show of those who have been denied their legal rights to their deeds would indeed be a positive action.
I for one will be there!
Dare I say it. 150 students can get the Government to listen to them by blocking buses. So how many buses can 100.000 people stop in relation to their rights for issuance of title deeds?
I recall joining CPAG in Peyia in a peaceful demonstration where the President was coming to open a school. Result, the President call off his visit.
Need I say more?
We have no complaints about the quality of the build of our house, we insisted on UK standard loft insulation, which was put in, we have a very efficient wood burning stove, gas central heating and air conditioning. The standard of the kitchen and bathrooms is excellent. We have never had any problems with damp, drafts or any of the other problems we have heard about.
However we still do not have title deeds, 5 years after moving in, and because of a family situation back in UK we need to sell and move back to support them, but if course no title deeds, quite rightly, no sale.
When will this useless government stop the interminable talking and get their act together and do something positive. Stop messing around with useless platitudes, admit the housing market as it stands is dead and buried and get a workable action plan together to at least let people who want to see be able to sell.
The Cypriot property industry has serious competition from Greece, and to an extent, from Spain as well as other destinations.
If you care to check out the lengths to which Greece has gone to attract Chinese buyers to a relatively clean and attractive property market, I think you would agree that our efforts so far have been undistinguished.
Let us hope that the timely warnings of the authorities in respect of fair conduct are heeded.
@Elizabeth – Yes, we moved into the property before its Certificate of Approval had been issued. Although our architect submitted the paperwork in 2004, it took the planning department nearly 6 years to visit, inspect the property and issue the Certificate.
It then took a further year to get the Title Deeds updated.
Yes, it was a risk – but I had a full set of architectural and structural plans and had followed the construction from start to finish and was confident there was no problem with the build.
‘Will the developers, estate agents and their chums in the legal profession and banking ever learn from their past misdemeanours?’ HIGHLY UNLIKELY
‘ Will the Cyprus government enact and enforce effective legislation to protect buyers from the ‘crooks’ and ‘charlatans’ ?’ ON PERFORMANCE TO DATE: VERY UNLIKELY
or is Cyprus destined to become a permanent ‘no go area’ for property UNLESS THE GOVERNMENT SERIOUSLY ADDRESSES THE MYRIAD OF INTER-CONNECTED SYSTEMIC SERIOUS CULTURALLY INGRAINED FAULT LINES – AND SOON! SADLY YES
On Ken’s point on Surveyors: there seem to be very few professionally qualified, competent and WILLING Valuers. We managed to find one, trained in UK to RICS Blue Book standards, but discovered afterwards he carried out the Full Structural Survey in less than 15 minutes, and that we’ll over 60% of his Report was word-for-word what he had submitted on a friends property several years earlier.
If the Cyprus property markets seize up completely, presently they seem seriously stalled, then there can be no hope of an economic recovery, even if the ‘Medoil Dream’ can actually be realised.
What a sad and sorry ‘State of Affairs’.
For those who take the trouble to reacquaint themselves with the 2007 video posted on this article, please note the nonsense being spewed out by the Cypriot MP and the usual deflection tactic he employs by lamely attempting to compare the British legal system with its Cypriot equivalent.
For those of you alert enough to catch the final part of what the MP said, when asked by the interviewer whether a property buyer in Cyprus would get due redress from the Cypriot equivalent of the U.K Law Society, the MP says, “The same happens here”.
As we all know, this is a downright lie.
Nigel,
I understand from a close friend that your property is really superb compared to what normally passes for a quality build in Cyprus.
Could I ask whether your family run contractor and/or architect allowed you to move into an illegal building without informing you that you were breaking criminal law by virtue of no completion certificate being issued at that time?
Also how many years were you living in this potentially dangerous position as many buyers still are? i.e. how many years did it take to obtain the completion certificate?
PS: I am glad everything worked out well for you in the end – no one deserves it more than you with all the effort you put in for others.
@steve – we had our house designed by a local architect and issued invitations to tender for it’s construction.
The family run building contractor we chose did an excellent job – as did our architect – and I would recommend both of them without hesitation.
A house that was built at the same time as ours by another contractor recently had its roof replaced due to shoddy construction.
There are good, honest and professional people in the construction industry – but sadly there are probably as many (if not more) after a fast buck.
Did anybody notice that the government minister had a smug grin on his face during his interview. Our British developer got thrown into jail for issuing dud cheques to clients to which he pleaded guilty. He was let out the following day and after several court cases and at the eleventh hour changed his plea to not guilty. He failed to turn up at any further court cases and fled the island
A good builder/developer in Cyprus can make more money in the long term by being upfront/honest and delivering a good product. They would also need knowledge of the local systems in place. Our developer from the UK had a fantastic product but took the get rich quick route. He is now on the run looking over his shoulder all the time. What a mug
@Andrew. With the help of our lawyer that is exactly what happened to us. 64,000cyp was secured on our property by the developer prior to our contract being registered.
It is all very well for the Interior Minister to grand stand but in reality he is part of the problem.
The EU don’t have the stomach to kick Cyprus out and the unsustainable debt will just increase (look at Greece). The current EU model does not work. It’s too difficult. A good teacher will tell you that one lesson plan does not fit a mixed ability class. That’s why we have streaming. However, the EU seems to do this and wants to lower the grades of the better performers (money from northern EU states) to raise the grades of the under achievers (give money to southern EU states). Life doesn’t work this way. The facts are the facts! The EU should break up. It’s simply boring now!
I wonder if any estate agents would care to respond this this article?
Perhaps there is a glimmer of hope! Again,however, they express ‘hope’ that changes will be made.
Why not demand that changes are made, within a time-scale and with some accountability attached?
Stop increasing taxes etc. so others can continue to take, it’s about time some real auditing was carried out.
As Janner says, it’s all about money.
Ethics and morals do not exist in the psych of many Cypriots and they are the ones who have screwed this country into the ground without a backward glance or thought for anyone but themselves. They play the moral high ground with Oscar winning performances then use every trick in the book (and then some) to squeeze yet more from an already dwindling market while crying ‘poor me’. And when the country has been bled dry, these will be the ones who will move to other countries like many of their fellows, and will be taking their wealth with them.
If title was to be exchanged at point of sale it would stop the second + mortgaging or borrowing on something that no longer belongs to the developer but that wouldn’t be in the interests of the banks, developers or lawyers etc so the chances of it ever happening here in La La Land is about as much as me winning the Grand National on a rocking horse.
I note that the Troika have asked for an up to date re evaluation of property which I am sure will go a long way to helping the current situation. I wonder if they (Troika) have ever had any information on any prospective purchaser who has asked a real estate agent for a full structural survey which for many properties is a must before purchase.
There are many very qualified property valuers in Cyprus who advertise those qualifications, but my experience is that it is very difficult to find a surveyor that will carry out a full structural survey.
If ‘the few good men’ in Cyprus can’t change things for the better – then I’m afraid the Republic deserves to go bust. Maybe it should – perhaps it would be better if it did – start from ground zero again.
Answers to the last para: No; No; Yes if foreign property investors have any sense at all!
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What good is compulsory registration of contracts of sale within six months. This gives a massive window of opportubity for developers to take out a mortgage on your land after a search is completed. Title Deeds should be ready for issue at the point of sale.
Sitting in a developer’s office with three other people the gentleman said to our group. “You must understand that here in Cyprus if a business opportunity is presented to you, and you fail to take advantage of that opportunity you are regarded as a poor businessman”.
No mention about ethics or being a good Christian.
We had just received his bill to pay all his back-taxes to the IRD before we could be issued with out title deeds.
“When will they ever learn”? They won’t! There is nothing to learn. ‘They’ (those in charge) know full well what they are doing and it’s in their best interests for things to continue this way. They will continue to do so until the money runs out. It’s all about the money.
They don’t care about the downside of the system and the repercussions for Cyprus, its people as a whole or individuals. Once the money dries up they will all have disappeared……..and left those who don’t matter (the common person) with dust……