PROPERTY sales in Cyprus during July fell to their lowest level since we started keeping records in 2006. During the month, a total of 408 contracts for the purchase of property were deposited at Land Registry offices compared with the 605 deposited in July 2011; a fall of 33%.
Of those 408 contracts, which include the purchase of residential & commercial properties and land, 69 (27%) were in favour of overseas buyers and 339 (63%) were in favour of Cypriot buyers.
Domestic sales
Overall 144 fewer properties were sold in July, a fall of 30% compared with July 2011. Sales in Nicosia fell by 65 (-45%), in Limassol they fell by 55 (-37%) and in Famagusta they fell by 30 (-44%).
On a more positive note, 4 more properties were sold in Larnaca and 2 more were sold in Paphos compared with July 2011.
In the first seven months of 2012 sales to the domestic market stood at 3,249 compared with 3,084 in the same period last year; an increase of 165 (5%).
As reported by Pavlos Loizou MRICS in his commentary on the RICS Cyprus Property Price Index that we published yesterday “The first half of 2012 saw investors postpone their decision making and look for safe havens. Property, both commercial and residential, was increasingly viewed as a risky asset and one with negative prospects in the near to medium term.
“This led to a reduction in interest from both local and overseas buyers, resulting in low transaction turnover. Local buyers in particular were the most discerning as the increase in unemployment and the worsening prospects of the local economy led to a sharp reduction in interest.”
Overseas sales
The overseas market continues to deteriorate, with the number of sales dropping in all areas once again during July (despite the alleged interest being shown by Chinese buyers).
The hardest hit area was Nicosia, where sales were down 13 (-68%) compared with July last year. Nicosia was followed by Limassol -12 (-41%), Famagusta -11 (-55%), Larnaca -8 (-32%) and finally Paphos -9 (-31%).
During the first seven months of 2012, sales to the overseas market stood at 869 – a decrease of 21% on the 1,098 sales in the same period last year; a fall of 229 (-21%).
Once dominated by buyers from the UK, the island’s overseas property market collapsed in 2009 and is unlikely to fully recover in the foreseeable future. The collapse has resulted in thousands of unsold holiday homes and apartments littering the island and property developers slashing prices in efforts to offload their unsold stock.
The collapse was a consequence of the global financial turmoil and the Title Deed scandals. The Title Deeds-cum-fraud mess, in which buyers found themselves being duped and mislead by the ‘crooks’ masquerading as ‘honest’ property developers and lawyers, has resulted in many potential overseas investors looking at safer places for their money.
In spite of some half-hearted attempts by the government to resolve the Title Deed fiasco there remain thousands buyers (both Cypriot and foreign) who although having paid for their properties in full do not have legal ownership.
Some of these buyers now face the very real threat of losing their homes as developers who mortgaged the land on which they were building, without the knowledge of the buyer, have collapsed – and the banks are looking to recover the debt.
Having exhausted local legal remedies in efforts to save their homes, buyers have taken their cases to the European Court of Human Rights. These have been accepted and will be heard in the coming months.