THE FINANCE Ministry is preparing a bill to help prevent a fall in Cyprus property prices in the event of a massive sale of properties that are now in the hands of the banks, according to a report in the Phileleftheros.
The bill is reported to include provisions enabling the banks to keep the properties on their books for five years rather than three years at present; they may also rent the properties and complete unfinished properties to make them more marketable.
Banks have a number of high value properties on their books, including:
- A 21,316 sqm. plot of land in Geroskipou (Paphos) with an indicative price of €4.475 million and another 66,954 sqm. piece of land in the same area valued at €8.750 million.
- A beachfront plot of land in Mouttalos (Paphos) measuring 23,255 sqm. valued at €9 million.
- A 14,039 sqm. piece of land in the Trinity touristic area of Paralimni (Famagusta) offered for sale at €5.6 million.
- Land in Engomi (Nicosia) valued at €11.5 million.
There are also properties in Limassol whose total value runs into several million Euros, including:
- A 454 sqm. villa in the San Rafael area on a 1,095 sqm plot of land and being offered for sale at a price of €9.7 million.
- A 555 sqm. villa being offered for sale at €5.7 million.
- An unfinished four bedroom villa in Agios Tychonas priced at €1.6 million.
And I’m not even trying to make sense of those prices of villas. €10 mil. villas in a place with such a shoddy infrastructure? Seriously? They must be high.
21,316 sqm @ €4.475 mil. -> €210 per sqm.
66,954 sqm @ €8.750 mil. -> €130 per sqm.
23,255 sqm. @ €9 mil. -> €390 per sqm.
14,039 sqm @ €5.6 mil. -> €400 per sqm.
Is it just me, or are these prices of land ridiculously high? The government wants to try to keep this laughable delusion going? Why?
By the time you add up all the hours spent by banks, lawyers and the government to cook up such a scheme – it would work out a lot cheaper for the banks/lawyers to simply discount the loans on the failing properties (especially – as by their own admission – they over-valued the properties). Add in the fact they know (and we know) they all between them mis-sold the loans on the properties in the first place – they created the problem!
Write to each property holder with a simple two-part proposal:
Proposal one – plan to keep the property
Proposal two – plan to dispose of the property
With an APPROPRIATE package for each.
That is common sense. However – in the last decade I have come to learn that the words ‘common sense’ and ‘The Republic of Cyprus’ don’t belong in the same sentence very often.
Has this “controlling” the market been attempted anywhere else before….? or is Cyprus a first yet again?
I was going to write how corrupt this place is but I’d rather not get myself worked up this morning.
The main 2 ways to keep the bank owned properties from causing an over-all drop in the island prices is by 1) not flooding the market and only listing a few properties at a time. 2) Use estate agents to sell the properties and for the banks to not try and become estate agents.
Is it ethical or in fact legal I wonder for a government to interfere to try and manipulate market prices? I would think the high valued properties highlighted as being on the banks books will remain there unless the prices are realistic or unless they can attract anyone wanting to launder money.
I should think it highly likely expensive property as above will be snapped up by foreign investors; except the Chinese may think twice apropos the latest scam.
Our solicitor in Nicosia said our Receivers were liable to pay the community charges and could be sued if they fail to pay up whether or not the apartments were rented or just sitting on their books.
All “owners” have to pay according to him.
Paul Evans I live on a development and have asked the lawyer same question, no answer….. Surely if the Bank is now the rightful owner they pay the charges.
“they may rent the properties”?? to whom…? there are already thousands of properties for rent.
“they are going to complete unfinished properties to make them more marketable”…who’s going to buy them ? there are thousands of properties unsold, and developers are still building new ones…
Whatever effort Georgiades may make, he won’t beat the law of supply and demand…and he won’t prevent banks to be willing to cut their losses…
If these properties are on a complex, does this mean the banks will be paying the communal maintenance fees if they are going to rent out properties? By not paying the communal fees, the banks will benefit from others keeping up the maintenance payments so that the banks can rent out or sell the property at a higher price as the complex will not look run down and neglected.
Ed: I have no idea who will pay the communal charges or what the arrangements will be.