HISTORICALLY June has been one of the better months for Cyprus property sales, but not June this year, which saw sales fall by 17 per cent compared with June 2017. Is this an omen of things to come?
According to the official figures published by the Department of Lands & Surveys, the number of property sale contracts deposited at Land Registry offices in the island’s five districts during June 2019 stood at 714 compared to the 858 deposited in June 2018.
As the Department has yet to publish a breakdown of sales, we cannot say whether the fall is due to reduction in sales to the local market or the overseas market (or both).
However, it’s possible that the tougher criteria introduced by the Cyprus Government on 15th May for those seeking to obtain Cypriot passports under the Cyprus Investment Programme have reduced the number of property sales to non-EU nationals.
As we reported on 23rd June in the article Cypriot passport Investment applications are falling, Costas Hadjipanayiotou, director of the Environment Department at the Ministry of Agriculture, said that “there are several applications under scrutiny, but added that no new applications have been received so far.” (This conflicts with the South China Morning Post article 3 days later stating that “Chinese investors are thronging the sunny shores of Cyprus in search of property and passports that will allow them to work, travel and live in the European Union.”)
Cyprus property sales – June 2019
With the exception of Paphos, where sales increased by 14% compared to June 2018, they fell in the remaining four districts.
Although more properties (219) were sold in Limassol that in any other district during June, the district experienced the highest fall (35%) in sales. Sales in Famagusta fell 30%, while sales in Larnaca and Nicosia fell by 23% and 1% respectively.
Total Property Sale Contracts – 2018/2019 Comparison
| District | Year | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Nicosia | 2018 | 146 | 96 | 126 | 117 | 153 | 146 | 176 | 91 | 118 | 145 | 161 | 131 |
| 2019 | 161 | 194 | 131 | 169 | 213 | 145 | |||||||
| Famagusta | 2018 | 48 | 52 | 40 | 52 | 79 | 61 | 61 | 50 | 45 | 57 | 47 | 48 |
| 2019 | 53 | 48 | 45 | 96 | 87 | 43 | |||||||
| Larnaca | 2018 | 112 | 99 | 116 | 83 | 113 | 133 | 112 | 94 | 121 | 116 | 143 | 103 |
| 2019 | 114 | 125 | 118 | 140 | 173 | 102 | |||||||
| Limassol | 2018 | 225 | 256 | 314 | 246 | 282 | 338 | 314 | 262 | 251 | 289 | 344 | 290 |
| 2019 | 251 | 256 | 287 | 428 | 546 | 219 | |||||||
| Paphos | 2018 | 164 | 163 | 172 | 157 | 201 | 180 | 233 | 156 | 152 | 204 | 230 | 230 |
| 2019 | 187 | 211 | 185 | 224 | 404 | 205 | |||||||
| Totals | 2018 | 695 | 666 | 768 | 655 | 828 | 858 | 896 | 653 | 687 | 811 | 925 | 800 |
| 2019 | 766 | 834 | 766 | 1057 | 1423 | 714 |
Property sales – year to date
Despite the fall of sales in June, the total number of Cyprus property sales in the first half of 2019 is 24% higher than the first half of last year.
In percentage terms, Paphos is leading the way with half year sales up 37% compared to last year. Sales in Nicosia are up 29%, while sales in Limassol, Larnaca and Famagusta are up 20%, 18% and 12% respectively. However, in terms of the total number of sales Limassol leads the way.
Dear Ed, I don’t understand your references to the Land Registry only assessing property values under conditions a) and b). Do they not, almost as a matter of routine, increase values of properties for which transfers are submitted and demand correspondingly higher transfer fees?
Ed: The Land Registry is required (by law) to calculate the Property Transfer Fees on it’s assessment of the property’s market value at its date of sale. This is to avoid fiddling the tax by under-declaring the the sale price (the figure written in the contract).
However, some people find that despite them not under-declaring the sale price, the Land Registry will still charge them more than they expected. Annoyingly the Land Registry will not reveal how arrived at the figure! But if someone feels they’ve been overcharged they can challenge the Land Registry by obtaining a couple of valuations from registered valuers. However, there is no guarantee that the Land Registry will accept these independent valuations.
If you look at the Land Registry’s statistics on property transfers you will see that the ‘declared sales price’ (the figure written in the contract) is around 7% less than the Land Registry’s assessment of the property’s market value ‘accepted sales price’.
The Land Registry will only calculate the Property Transfer Fees on it’s assessment of the property’s current market value if the purchaser failed to deposit their contract of sale at the Land Registry when they purchased and the purchaser cannot provide documentary evidence that he purchased the property when he said he did (utility bills, etc.)
Some impressive growth numbers for 2019 to date, but percentage increases don’t tell the whole story. Recent buyers are doing well, but the fall in sales and their value over the years from 2007 means increases in the many hundreds of percent are needed to get back to 2007 values.
A lot of property is selling in the Paphos area now for 50% of 2004 values, while the Land Registry pretends current values are 20% higher than they really are to bump up transfer fees.
Ed: The Land Registry assesses Property Transfer Fees on the market value of a property at its date of purchase. It will only assess the Property Transfer Fees at the date of the property’s transfer if (a) the purchaser did not deposit their contract of sale at the Land Registry and (b) the purchaser cannot provide evidence that he purchased the property when he said he did.
If purchasers consider they’re being ripped-off, they can appeal by getting independent valuations.