INTERNATIONAL lenders believe that the property market will pick up in 2014, according to the chairman of the Cyprus Land and Building Developers Association (LBDA) Pantelis Leptos.
The association met with Troika technocrats yesterday to present their estimations regarding the course of the real estate market and the problems faced.
“What the Troika agrees upon is that if we want to restart the economy, the real estate sector must be supported. They see an important improvement of the situation in 2014 in terms of real estate,” Leptos said after the meeting.
Commenting on the Troika’s optimistic prediction, Leptos noted that there have been new investments from abroad worth €500 million over the last year.
“These are fresh investments and money that the economy needed and the Troika acknowledges that these investments were made at the most difficult point in the last decades. So these are positive things and there is more that we can do,” he added.
The chairman of the association also noted that “Pimco has miscalculated real estate prices in its predictions and the Troika agrees that we will not see such predictions verified in Cyprus”.
This view is also shared by the chairman of the International Real Estate Federation (FIABCI) Lakis Tofarides who refuted Pimco’s bank stress test estimations and pointed out that such price reductions would only become a reality in the case of mass property repossessions.
“I do not expect that there will be mass repossessions tomorrow.
“I do not expect this because it would bring destruction to the banking sector itself and by extension the country’s economy,” Tofarides said.
However, FIABCI chairman noted that property prices have reached their lowest point taking into consideration the development cost of a new home compared to those sold.
Real estate sales have been reduced by 60% while sales to foreigners have reached more than €500m.
Leptos outlined the association’s suggestions to help kick-start the sector including the abolition of transfer fees, reduction of capital gains tax in case of reinvestment, reduction of bureaucracy and speeding up the issuance of title deeds.
With regard to repossessions, he said that since Cyprus is in an emergency situation, people should not be expected to live up to their obligations as normal, noting that “adequate time should be allowed to allow the Cypriot economy to return to normalcy”.
@p.panikos
“Real Estate Sector is the only reliable business sector in the island”
Mr. Panikos with all due respect, if this statement is the valid, what happened to the numerous project up for sale that advertised GUARANTEED rental income for up to 5 years for those who invested. I used to see these adverts all over Limassol and laugh…where are they now?
I don’t think people commenting here have anything against Cyprus or to promote propaganda, after all it was a dream destination for all and still is, but you cannot deny the fact that corruption is inherent in all layers of society, just take the match fixing scandals, the Dromolaxia scandal, or the elite of the political establishment knowing in advance of the pending haircut-theft of march (and so conveniently shifting funds abroad), Mari etc etc
And how long can the real estate sector be a supporting column of the economy?, until every last inch of the island is concreted over? the occupation in the north has not brought about any good things, apart from one, ‘they’ have not destroyed as much of the area as has been lost forever in the south due to the frenzy of the developers that materialized out of nowhere after EU accession in 2004. every Tom Dick and Harry became a developer.
Interpreting the majority of the comments, it is obvious that you would prefer a collapse of the Cypriot economy. Positive news are bad news for some of you. Time to consult your psychiatrist I think…
@John P. – The real estate sector used to be a supporting pillar of the Cypriot economy.
However, antiquated property laws and antediluvian bureaucratic processes together with the nefarious actions of developers, lawyers and estate agents, plus the banks’ poor (non-existent) risk management practices where loans were granted on personal relationships has destroyed its credibility (at least amongst English-speaking buyers).
Credibility is like virginity, once you’ve lost it you cannot get it back.
IMHO it’s going to take a very long time for the real estate sector to recover. It would help if the government introduced and enforced strict consumer protection laws and sorted out the Title Deed fiasco.
Real Estate sector is actually a supporting pillar of Cypriot economy. I think it is important that in a time of crisis the sector proves to be resilient, attracting investors from abroad.
Many of the comments are a perfect example of persistent propaganda not against a man or a sector, but against a whole country. But you have missed something guys. No matter how hard you fight with your words, the reality can’t be changed. Real Estate Sector is the only reliable business sector in the island. The fact that troika has agreed on that is a very important development.
@Mr Leptos. Even when the development industry was at it’s peak of profitability you and other developers didn’t live up to your obligations. I notice in all your statements no comment is ever made about why you didn’t pay your debt; it’s as if it never happened. Such arrogance is astonishing and an insult to all the unfortunate house buyers who would sell up and get off this island if they could.
Getting your own house in order, clearing your NPLs and giving people their title deeds, just might encourage some interest in the CY toxic housing market again, but I can’t envisage a crush at the airport gates.
@ The Troika, unless there are full, clean and unencumbered,( ie; without this nonsense of having to pay the developers debts, ad nauseum,) Title Deeds available at point of sale to the Property Buyer in Cyprus, DREAM ON! RB.
Speeding up the issuance of title deeds indeed. What time-scales do they envisage 5 years instead of 10 maybe.
Here is a thought for you Mr. Chairman, until you remove all your encumbrances from homes already sold and until you issue title deeds to new buyers at the point of sale, your property market deserves to collapse. As for living up to your obligations “as normal”, that is the last thing people want to hear.
Dear Cypriot bureaucrats and Troika/IMF representatives
Please spend less time issuing statements and window dressing, and spend more time rolling up your sleeves fixing the issues we can ALL see are the problem.
Thank you
Yours – the weary and exhausted property investor community who (foolishly) invested in your little island.
If Mr Leptos believes what he says, he is either deluded or …. well , I will not go there !! Property prices are still too high. Compared to other countries (Florida, Spain, Portugal, need I go on) you could assume that another 20% to 30% drop in prices could be anticipated.
The Chinese – who were going to buy up everything – have gone. So, where will the buyers come from. Until prices drop further and the Title Deeds become available at point of sale the decline will continue. Another negative is the cost of living in Cyprus.
Unfortunately, Mr Leptos’ idea of ‘normalcy’ is what has got the Cyprus economy into the state it’s in today and, moreover, his suggestion that “people should not be expected to live up to their obligations” is exactly the mentality that will ensure its decline continues.
This statement that is supposed to reassure us comes from the same people that couldn’t forecast that if you borrow millions from the banks, don’t pay your taxes and generally abuse the trust placed in them by people who have invested their hard earned cash in Cyprus that the gravy train would not crash.
“Trust me, I am a Cypriot leader” and I am pulling this alleged 500 million out of the bag again.
I DO NOT THINK SO!!
I would much prefer to have read an official statement directly from the troika rather than second hand in this fashion.
The market has been a busted flush for several years for reasons that have been discussed ad nauseam and flippant talk from the mouths of developers have nil credibility.
@ Mr Leptos
“They see an important improvement of the situation in 2014 in terms of real estate,†Leptos said after the meeting.”
The Troika Bailout MOU conditions stipulate that all title deeds must be transferred to buyers by the end of 2014 and for any encumbrances to be lifted.
If so, will your company be lifting your encumbrances i.e. mortgages on all properties already paid for in full (mortgages which you dishonestly hid from these buyers) by this deadline?
Will your company be transferring all title deeds to buyers by this deadline?
A simple yes or no will do!
PS. Do you remember this article? Property developers are optimistic that the real estate sector will recover from the economic crisis in 2010
@jjames – The fact of the matter is that until all encumbrances have been removed, you cannot get title even if you wanted to.
It would be interesting to know who these foreign investors are and how their support is to be fed into the economy.
Why do I get the feeling that, if certain elements within the real estate sector gain the support they’re after, we without title deeds will be put on the “back-burner” and forgotten?
How will the issuance of deeds be accelerated? I for one will NOT be accepting mine until ALL encumbrances are cleared. To settle for less would be foolish.