Property developers in are calling for tighter rules on foreign property investors in Cyprus. They say overseas buyers are pushing up land prices and warn that some developers may lack the experience needed to build responsibly.
Their proposals include regular training and licence renewals for technical directors, as well as checks on who can set up land development companies. They say their objective is to protect local buyers and make sure investment benefits Cyprus.
We shouldn’t sell our land without safeguards
Stelios Gabriel, president of the Cyprus Federation of Building Contractors’ Associations (OSEOK), told StockWatch that some foreign property investors were setting up construction companies and hiring technical directors who might no longer have up-to-date skills.
He wants the law changed so all technical directors receive training. He also says construction companies should employ registered contractors, rather than relying on retired technical directors.
Gabriel plans to propose that professional licences, which currently last for life, be renewed every two or three years after an exam.
He said Cyprus should welcome investment and development, but in a way that avoids overheating the property market or leaving homes unused. The country should also look at the quality of investors and whether their projects benefit local communities, he said. Gabriel added that local buyers can only afford so much: if prices go too high, many will be priced out.
Larnaca draws Israeli, Lebanese and Jordanian investors
Michalis Zavos, chief executive of the D. Zavos Group, also wants safeguards, though he says foreign property investors in Cyprus should not be shut out.
He suggests that when a businessperson from outside the EU sets up a land development company, Cypriots should own at least 51% of it.
Zavos told StockWatch that some foreign developers did not know the local market as well as Cypriot firms. He said investors comparing Cyprus with more expensive markets such as Israel might be willing to pay too much for land. A plot worth €500,000 could sell for €900,000, he said, adding that this could push apartment prices up by 35% to 40%.
He singled out Larnaca, where he said Israeli, Lebanese and Jordanian investors had become especially active. Zavos alleged that some were buying land, drawing up plans and pre-selling apartments before getting the required permits, which can take up to two years. Some investors, he added, pool their money to buy, build and sell properties off-plan.
Zavos said the lack of safeguards reminded him of problems linked to Cyprus’ former “golden passports” scheme. He also argued that some money brought into Cyprus later leaves the country again.
He suggested that the government consider a tax on foreign investors in Cyprus buying land for development, with the money going into a fund to help people who need housing. Greece, he said, was planning to raise a property tax for buyers from outside the EU from 3% to 15% from 1 January 2027.
Zavos said the market, Cypriot businesses and local people hoping to buy a home all needed protection.
Foreign investment should benefit Cyprus
George Chrysochos, director of the Cyfield Group, said the key question was what foreign investment gave back to Cyprus.
He argued that the local economy did not benefit when overseas investors set up companies with people who had been out of the industry for years, then built and sold properties without using the experience of Cypriot developers.
Chrysochos said the developers’ association wanted limits and checks on land sales to foreign buyers. It had proposed a maximum purchase of 4,000 square metres, he said.
He also questioned why investors from Israel and Lebanon did not use local contractors, who know the development rules and local labour market. He raised concerns about the quality of some projects and backed tighter checks on foreign purchases of land.
Translated and adapted from an article published by StockWatch
Fair enough for property developers to call for curbs on foreign property investors.
However, some curbs should be called for developers too.
What happens now apartments are delivered as soon as possible for the developer to receive the full price. Afterwards, owners might wait years before the deeds are issued, simply because the building is not fully completed or compliant with some technical systems yet.
Since there is no time limit nor motivation for the developer to promptly comply with, they simply tend to “forget” about them. Sometimes for several years.
Developers should not be allowed to deliver dwellings, UNLESS the THE FINAL CERTIFICATE OF APPROVAL has been released. It can be a matter of safety as well.
The way the current system works, nothing would get built if developers couldn’t sell a property before its Final Certificate of Approval had been issued.
It costs many millions to build a development and developers simply do not have the financial resources to spent that money and then wait to have the building inspected, which only happens when all the properties on the development have been built and inspected.
To protect their interests, people should get a decent lawyer to draw up the contract and hold back money until the Final Certificate of Approval (and Title Deed) are issued.
I’ve written an article on Due Diligence that appears on every page.
Some organisations want to stop developers selling properties until planning permission and building permits have been authorised
Also, if the developer fails to deliver what’s agreed in the contract, you can sue.
BUYERS BEWARE