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Saturday 23rd January 2021
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Bank of Cyprus, the reluctant estate agent

Bank of Cyprus property for sale
House for sale in Strovolos, Nicosia by BoC remu priced at €5,130,000

THOUGH MASS foreclosures are a new phenomenon in Cyprus, seeking out bargains off the backs of those who have lost their properties to the bank, might appear callous, even though primary homes are not a target, Bank of Cyprus insists.

The complex issue was highlighted a week ago when the bank was forced to suspend an eviction order of a woman in Limassol, who reportedly owed them around €80,000. Representatives of the movement against foreclosures, single parent families, and politicians, gathered outside the house in Ayios Tychonas in Limassol to protest the bank’s intention to take the house.

The Bank of Cyprus (BoC) was planning to put the property, reportedly worth over €300,000, up for sale. It came to light later that the woman reportedly only uses the two-storey villa with a swimming pool for a few months every year and that she spends the rest of the time in Romania, her home country.

Bank sources said the bank was not even aware that someone lived in the house. The bailiff had to post the eviction order on the door because there was no one to receive it. The house was acquired by the husband with a loan from BoC, which has not been serviced since 2009. With interest, it had reached €94,000.

So, with a sort of clear conscience, it seemed safe enough morally to at least peruse the website of the bank’s real estate management unit (Remu).

One of the first featured offerings that hits the house hunter on the website is a staggering €9.7m price tag for a big but bland home in Limassol. You can actually buy an entire island with three villas for less than that in Belize. How about a €5.1m house in Strovolos, Nicosia? Umm, no, not as long as a castle in France costs €1.2m.

To be fair, the Remu website has a wide variety of residential and commercial properties, and plots around the island, many under €100,000. In the Nicosia district alone Remu manages 120-odd properties of which 33 are residential, 26 commercial and 64 are plots. These include finished and unfinished apartments, houses and businesses strewn across the city and outlying villages.

The question is, however, with the market improving but still depressed, who is going to buy an unfinished property, or indeed a shopping mall for €34m?

Remu is about to release its 2016 year-end report on February 28 and no one from the organisation was able to speak the Sunday Mail before then, so we turned to property expert Nigel Howarth who runs the Cyprus Property News website.

He believes one of the biggest problems BoC faces is offloading the unfinished properties, especially the commercial developments. Asked who he thought might buy a €9.7m home in Limassol, Howarth said: “A property is worth whatever someone is willing to pay for it… but to be honest, I can’t imagine.” He also mentioned the shopping mall. “Who is going to buy that?” he said, though added that the bank must offer the properties at 80 per cent of the value in the first instance and cannot lower the prices for a year.

According to the latest figures from Remu, via the BoC website, during the first nine months of 2016, the unit acquired €894m in assets via the execution of debt for property swaps.

During those nine months, the bank completed the disposal of real estate assets amounting to €110m. As of September 30 2016, Remu was managing properties with a total value of €1.3bn and was servicing either completed or in progress properties for over 650 assets.

Last June, properties worth €201m in the unit’s possession were located abroad, mainly in Greece.

Howarth said much of this could have been avoided if during the ‘good times’, the bank had gone after developers who had not paid their mortgages.

“They never chased them and now they have to foreclose,” he said. “They are going to have a problem to unload large properties. They may have to sell to other companies just to get rid of the debt as they can only have the properties on their books for three years.”

Howarth also said that not only were so many of the properties unfinished as they were foreclosed from developers but those – even the finished ones – as long as they remained on the market, would cost the bank money in maintenance. “It’s a bit of a ridiculous situation,” he added. “Banks are not real-estate agents.”

There appeared to be some light at the end of the tunnel during the week when Moody’s Investors Service said that the recovery of property prices, reported by the Central Bank of Cyprus, would improve the asset quality of Cypriot banks, which was a “credit positive”.

“Recovering property prices would support the construction industry, incentivise mortgage repayments from strategic defaulters who have the capacity but are unwilling to repay and allow banks to offload real estate taken on their balance sheet through debt-to-asset swaps,” Moody’s said.

Through loan restructurings involving debt-to-asset swaps, Moody’s said BoC, whose property now makes up 6 per cent of its total assets, would be facilitated by a gradually recovering property market, which would reduce the likelihood of the bank recording losses.

The real estate market showed signs of recovery last year partly on incentives given by the government to property buyers and partly on an increase in loan restructurings involving debt-to-asset swaps. Total property transactions rose 43 per cent last year to 7,063. Residential property prices rose marginally in the third quarter of 2016 compared to the previous quarter.


  1. The main issue with Cyprus is that the average income is €2000/month, which means the average household should be able to buy no more than a dwelling around €120,000 … Problem is the average house is around 300-350 000… (no wonder there is 50% NPL then…)

    This being said, I don’t see what is the problem of getting people out of their home if they can’t pay for it…just buy something smaller or rent…AS ANYWHERE ELSE IN EUROPE.

  2. @ Jill

    It may not be wise or indeed fair to pass rash judgement on all those who failed to pay their mortgage.

    It takes a great leap of faith to keep paying a mortgage to a bank that, if legally permitted, would repossess your home in a heart beat and without an ounce of remorse.

    Recent media reports would indicate that they are still pursuing their opportunity to do so through the courts right now, manifested by court injunctions to prevent deeds transfers to rightful owners, including those who have paid fully for their property.

    I have paid my mortgage faithfully since 2007. I found out in 2010 that there was a prior developer mortgage, with the same bank, to which not a single cent had been paid towards since 2004. They had conveniently failed to inform me of this while, along with my lawyer, gleefully watching me sign my loan agreement.

    When the prior mortgage came to light in 2010 I immediately made an appointment to speak to the bank and their reaction was a shrug of the shoulders and advice to “get yourself a lawyer”.

    I can assure you that I was sorely tempted to stop any further payments to the mortgage and still worry that it was a huge mistake to continue paying.

    It seems odd to me that this property is described as being a 300,000e property yet the woman owes the bank only €80,000. What is the story re the rest of the purchase price. I note too that the author says that the woman “reportedly” only spends a few months a year there. This sounds like media speak for “cannot be verified”.

    We should not be too quick to pass judgement on those who have failed to pay the bank.

    The banks have shown themselves to be at the very best totally incompetent and at worst downright fraudulent towards thousand of buyers.

    To show any sympathy for the banks displays a complete misunderstanding of why the banks are in the trouble they are in.

    To believe that they were put off the repossession because of a sudden attack of conscience due to the discovery of someone living there seems highly naive.

    It seems much more likely to me that they were hoping to complete their dastardly deed without the glare of any publicity and were taken by surprise.

    I fear the recent increase of articles in the media re bank foreclosure, along with statements from the EU and various other financial institutions pointing to a need for strengthening the ability to repossess, is preparing the ground for what lies ahead. It’s not good.

    I suggest we keep our sympathy for those who deserve it. The victims of this huge scam.

  3. I’m sorry, but it seems to me that the people who stopped the Bank of Cyprus foreclosing on the house in Limassol, are not using their heads!!! This is a loan which hasn’t been serviced since 2009 for goodness sake!! It is a holiday home and the owner has their primary residence in Romania!! What is their problem?

    In fact, why have the Bank of Cyprus left it this long? If you don’t pay for something, you lose it, it’s that simple…. The problem in Cyprus is that people have got used to the fact that they can take money out of a deep well and not pay it back.

    Now the banks (who are willing to take the homes of people who have bought and paid for them, remember) havn’t got the backbone to do what they should have done years ago!!

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