FIGURES released by the Department of Land and Surveys earlier today reveal that the number of property sale contracts deposited at Land Registries last year fell to their lowest since the Department started publishing figures in 2000.
Domestic demand is being depressed by uncertainty in the market, record levels of unemployment and a lack of liquidity.
Speaking to Stockwatch, property valuer Polys Kourousides said that it is difficult to predict recovery. “The lack of liquidity and the fear for investments cannot change things”, he said.
“We do not expect recovery in 2012 although there are good opportunities in the market”, he stressed.
According to the figures the number of sale contracts deposited in 2011 fell to 7,018; a drop of 18% on the 8,598 deposited during 2010. Sales to overseas buyers accounted for just under a quarter of all properties sold.
Speaking to OPP last week after the publication of the overseas sales figures, Yiannis Misirlis of Limassol-based Imperio Properties, said “2011 has been a bad year for the property market in Cyprus. Despite the upward trends in the first half of the year, the year ended with a big decline of the overall sales. The East (Ayia Napa, Larnaca) and the West (Paphos) of the island seem to be the areas most affected, although the same signs start to appear in Limassol and Nicosia (traditionally the best performing areas) too.
The foreign investments seem to be more ‘reserved’ too. A large part of our buyer community continues to come from Russia, and a smaller part from Asia and the Arab world. The Arab Spring seems to be helping a bit. And people seem to be more selective in terms of quality and prime location. The latter (prime location) seems to be able to attract a premium again. I see the same trend for 2012 … quality will trump price.”
Ioannis Verdelis, a consultant with Best International, believes that perception and confidence lie at the heart of the difficulties in Cyprus.
“Few markets have done more to hurt investor confidence than Cyprus has,” he told OPP last week. “The ongoing North Cyprus political situation has always been in buyers thinking, but for years buyers in the South at least knew they enjoyed the protection of a developed European country.”
“However, story after story has broken to the press with developments stalling, title deeds not existing, and of course recently banks foreclosing properties in situations where a developer defaulted and had not registered titles for existing buyers.”
Verdelis would like to see a more pro-active fight-back from the authorities to address these perception problems.
“The Cyprus market has a lot going for it,” he told OPP, “but it takes time to educate people. To bring investor confidence back would require bold steps from the local authorities to resolve the ongoing title problems. A lot of steps have been taken to this direction already, but I think it will take bold moves to get the attention of the media and buyers again.”
Update 10th January
Listen to an interview between myself and Nathan Morley on CyBC Radio 2 earlier this evening.