Cyprus Property News magazine for overseas buyers & real estate investors

Saturday 4th July 2020
Home News Luxury homes go under the hammer

Luxury homes go under the hammer

Luxury homes go under the hammerOVER a hundred properties, including luxury mansions, will soon go under the hammer after their owners failed to pay back bank loans, incyprus reports.

Two of the luxury homes belong to a father and his daughter.

According to Phileleftheros, one of the mansions – said to be worth over €1 million and used as a main residence – belongs to a person who, since 2008, has failed to pay a single cent back on a loan from the Bank of Cyprus. The bank, the paper said, believes the homeowner is in a position to pay back the loan but is choosing not to.

Situated in a coveted area of Nicosia, the lavish property includes a 520 square metre main house, swimming pool, and a second, smaller, house on the premises. Another two luxury houses, each worth close to €1 million are also reported to be up for auction soon – again due to their owners failing to pay back their loans with the bank.

According to banking sources, the act itself of threatening to take away their homes springs some wealthy homeowners into action and they either immediately recommence repayments of their loans or even payoff the entire debt in full.

Meanwhile, another 125 properties are up for auction shortly, worth a total of €24.6 million. These include a hotel worth €850,000, 10 houses and apartments – which are already built or in the midst of being constructed, 11 commercial properties include offices and shops, factories and farms.

Also up for auction are 22 plots of land suitable for building on, 81 pieces of rural land, and a number of fields.

9 COMMENTS

  1. Question,,,,,,,

    how does one get more information on these auctions including a listing of all properties?

    Ed: Please refer to my earlier reply to the same question.

  2. Where can I get details of this upcoming auction pls

    Ed: Please see my earlier reply to M livsey.

  3. Times are changing and the big changes I see here revolve around repossession and sale of a main residence. A Brit having lunch with his golf partners, wealthy locals and expats, discovered he was the only one who did not have a significant mortgage on his main residence and the others were paying nothing back. They told him that they would not be evicted from their main residences and eventually the mortgages would be written off by the bank.

    In the days before the Cyprus bailout, the banks allowed mortgage debts to build because they used the appreciating values of the properties to avoid classing these mortgages as non-performing. Then the Troika arrived and told them that any loan not being repaid for a period of, I think, 6 months must be classed as non-performing and steps be taken to recover the funds as would happen in the rest of the world.

    The other side of the coin is that there is money to be made in the eviction and resale process and it might be pushed hard, to the detriment of some genuine hardship cases who need renegotiation rather than eviction.

    Ed: According to the IMF’s Compilation Guide on Financial Soundness Indicators 2004:

    A loan is nonperforming when payments of interest and/or principal are past due by 90 days or more, or interest payments equal to 90 days or more have been capitalized, refinanced, or delayed by agreement, or payments are less than 90 days overdue, but there are other good reasons – such as a debtor filing for bankruptcy – to doubt that payments will be made in full.

    After a loan is classified as nonperforming, it (and/or any replacement loans(s) should remain classified as such until written off or payments of interest and/or principal are received on this or subsequent loans that replace the original.

    In efforts to prevent loans becoming nonperforming, Cyprus used to reschedule them which effectively made them a ‘new’ loan.

    (See also: Independent Due Diligence of the Banking System of Cyprus – March 2013)

  4. Madam, Sir,
    How will it be possible to participate to the the auctions? Does a detailed list of properties to be sell exist?
    Where can I find any useful information?
    I thank you for your kind consideration and any reply you can provide to me.
    Best regards

    Ed: I have no further information on the properties to be auctioned – suggest you get in touch with the banks. Here are a couple of links that should help: http://propertiesforsale.bankofcyprus.com/ and https://www.hellenicbank.com/en/Properties/property-of-hellenic-bank-in-cyprus1570 .

  5. There are far too many strategic defaulters some of whom who are receiving rental income on properties they had no intention of paying for so well done the banks and welcome to the real world to the scammers. Sadly it detracts from those who genuinely have befallen unexpected hard times and are struggling, in no small part sometimes due to the actions of their scamming compatriots.

  6. Nigel, I recall Mr. Persianis of the BoC saying on TV that the bank will be looking at helping these persons to downsize….just curious, and have no idea though if this is happening in reality….

    But good on the bank I say, I borrow money (in essence other deposit holders money) I buy my 1 million plus mansion, fail to make repayments (and can pay these) and expect to be allowed to get away this?

    Ed: I can’t comment on Mr. Persianis statement. But, in my opinion, strategic defaulters (those who can pay but refuse to do so) deserve everything they get.

  7. Did I understand that at the last property auction nothing was sold?

    Ed: At the last auction three plots attracted interest yielding €1.05 million and I understand that an office building in Ayios Theodoros was also sold for €901k.

Comments are closed.

WEATHER FORECAST

EXCHANGE RATES

EUR - Euro Member Countries
GBP
1.1100
RUB
0.0124
CNY
0.1258
CHF
0.9402

TOP STORIES

Commission approves Cyprus’ airlines incentive scheme

The European Commission has approved a €6.3 million Cypriot incentive scheme towards airlines affected by the coronavirus outbreak, supporting tourism and possibly the overseas property market.

Cyprus property sales recovering

Property sales in Cyprus showed signs of making a recovery in June following the Government's easing of lockdown measures and its decision to subsidise housing loans.

Cyprus tightens grip on ‘golden passport’ scheme

Cyprus has not processed any passport applications of a foreign investor since January, pending the approval of tougher criteria regulating the Citizenship for Investment Scheme.

Guide to residency in Cyprus

This guide to residency in Cyprus for UK nationals has been issued by the British High Commission in Nicosia to explain the importance of obtaining or updating their residency status.