As he noted, if it had not been for Denis O’Hare and CPAG, the government would never have decided at long last to try to bring some order and control into the chaos and scandal of Cyprus title deeds and developer mismanagement. If CPAG decamps to another country, there will no longer be available a solid anchor on the ground representing foreign and Cypriot buyers. This is not something for bad developers and their supporters to crow about – far from it. The good developers will suffer along with the bad.
Having attacked and antagonised CPAG instead of seeking co-operation, some of the worst developers have now created a formidable enemy beyond their reach. CPAG has always shown how sophisticated, agile and media-savvy it is in protecting property buyers and challenging the vested interests and bad practices of the property industry. But, as a non-funded self-help group it had no real teeth.
Now it is reported that the new CPAG will be an entirely different organisation, with substantial funding and backing, a far more ‘strident’ strategy and a global reach in terms of communication and influence. I interpret this to mean that CPAG will be going for the jugulars of bad Cyprus developers and will not be taking any prisoners. Not good news for Cyprus’ image or fortunes.
There is also the question of the banks’ role in the whole sorry mess and the new CPAG is unlikely to ignore that. As the recent Toscafund Asset Management report on Cyprus emphasised Cyprus banks are vulnerable to the inevitable further slide in property values which may involve a sharp correction.
The banks would then be forced to either liquidate immovable property at fire-sale prices or extend loans but with the risk of creating a massive toxic debt bubble already thought to be in excess of €7bn.
Perhaps the worst aspect of all this is the emergence of libel suits, asset seizure orders and arrest warrants against property buyers who dare to complain about bad treatment by developers. It is rare for anything like this to happen in any other sector – after all, if customers really are a company’s greatest asset they need to be treated with respect not bullied.
If legal action against dissatisfied buyers becomes a trend, it will be the final nail in the coffin of the Cyprus property market. Who would want to buy here with such appalling intimidation? I quote one analyst’s recent view from outside Europe: “…..the property market situation in Cyprus continues to spiral downward unabated i.e. straight into the toilet!”
About the author
Dr Alan Waring is an international risk management consultant with extensive experience in Europe, Asia and the Middle East with industrial, commercial and governmental clients.
Contact: waringa@cytanet.com.cy
©2010 Alan Waring