Limassol dominated the Cypriot property market in 2023

Kyriacos Nicolaou
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Limassol dominated the Cypriot property market in 2023

Cypriot real estate data analytics firm Ask Wire on Monday released a report outlining the ten most lucrative property transactions completed in Cyprus during 2023, along with additional analysis pertaining to the Cypriot property market.

In its report, the company highlighted key trends, which again showed the dominance of high-value deals, particularly in the district of Limassol.

According to the report, the fifty largest transactions, distributed evenly across the districts, amounted to a total of €285.8 million.

Among these transactions, the ten most expensive sales collectively reached €120.4 million in value, with the costliest single transaction involving the sale of a plot of land in the Limassol municipality for €22.1 million.

Moreover, Limassol led the pack in both the number and value of transactions, boasting nine out of the ten most expensive deals.

Commenting on the finding, CEO of Ask Wire Pavlos Loizou said that “the analysis reveals that high-value property sales dominated the market in 2023, with Limassol confirming its reputation as the district with the most expensive properties”.

“An intriguing discovery is the prominence of land transactions among the top sales,” he added.

The Ask Wire CEO explained that “beyond the priciest deal of 2023 involving land, seven out of the ten most expensive transactions were land-related”.

“This signals the future dynamics of the market, as these high-value plots are mainly earmarked for development within the next 2-5 years,” Loizou concluded.

The total value of these transactions in Limassol reached €111.2 million. Famagusta secured the tenth spot with a single transaction valued at €46.4 million.

Larnaca and Paphos followed closely behind, with their top ten sales for 2023 amounting to €42.6 million and €41.1 million, respectively.

Notably, Nicosia’s highest-priced properties sold in the same period totalled €35.5 million.

In addition to the data concerning the ten most expensive sales of 2023, Ask Wire also shared details on the ten priciest real estate transactions completed in Cyprus in December 2023.

In this regard, Limassol led the way again with the highest number of sales (7) in the top ten, followed by Larnaca with two and Paphos with one.

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Cyprus property buyers get increased legal protection

Nigel Howarth
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Cyprus property buyers get increased legal protection

The legal protection offered to those property buyers in the Republic of Cyprus has been enhanced by  amendments to ‘The Sale of Real Estate (Special Execution) Laws of 2011 to 2020’.

Among other things, the amendments require the vendor (seller) of the property to include a Search Certificate in the contract of sale, which must be dated no more than five working days before the contract was signed.

Furthermore, if the property is encumbered by a mortgage or an earlier contract, the Land Registry will only accept the deposit of the contract of sale for that property if it is accompanied by written declarations from the mortgagor(s) (typically a bank) and vendor(s), of which the buyer must have been informed in writing.

This change in the law will help ensure that those buying property are promptly and accurately advised of any mortgages and contracts encumbering the property.

The change will also help safeguard property buyers from potential fraud, particularly in cases where developers have mortgaged a share of the land on which they’re building to help secure home loans for other buyers on their developments.

The written declaration from the mortgagor outlines the details of the mortgage registered on the vendor’s property. It applies to contracts between the vendor and property buyers for the sale of the property or any units, apartments, or houses on the property.

If the vendor took out a mortgage to use for his own purposes (building the properties), the mortgagor confirms that depositing 95% of the contract amount into the vendor’s bank account will result in the mortgagor discharging the property from the mortgage. However, if the seller registered the mortgage to help another buyer to purchase unit(s), the declared amount is zero.

Once the mortgagor has discharged the property from the mortgage, the Land Registry transfers the property to the buyer’s name, unencumbered by the mortgage or any other encumbrances that may affect the property or its new owner.

Should the vendor or mortgagor fail in their legal obligations, the Director of the Land Registry has the power to impose fines on both parties of up to €10,000 and €100,000 respectively.

The changes in the law addresses the problems that resulted in property buyers becoming ‘trapped‘ and improves the legal security and transparency of property transactions. It ensures that properties are transferred to buyers free of any encumbrances and guarantees that the sale price paid by the buyer is used to settle any existing mortgages.

‘Photovoltaics for all’ given the green light

Nigel Howarth
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‘Photovoltaics for all’ given the green light

The Cabinet has given the green light to implementing the ‘Photovoltaics for All’ scheme, subsidising up to 6,000 homeowners to install solar systems on their roofs, which will be up and running from the end of next month.

The subsidy scheme comprises five distinct categories, each crafted to “democratise access to solar energy and roof insulation for all households,” according to a government announcement.

The latest version of the scheme will allow homeowners to install a photovoltaic (PV) system to reduce consumption and lower electricity bills, regardless of whether they have the initial capital needed.

In the imminent days, installers specialising in photovoltaics and roof insulation will start to enrol with a government register, laying the groundwork for the public to initiate their applications.

The budget for the latest version of the ‘Photovoltaics for All’ plan is €30 million, expected to cover 6,000 applications from homeowners who lack the initial capital to install a photovoltaic system of up to 4 kW in their homes, from the earlier maximum 4.16kW.

Photovoltaics and insulation

The scheme’s categories are as follows:

A1: Photovoltaics – General, offers a grant of €375 per kW and a maximum grant of €1,500 (4kW), with a 50% increase for homes in mountainous areas.

A2: Photovoltaics – Vulnerable households, provides a grant of €1,250 per kW and a maximum grant of €6,250 (5kW).

A3: Photovoltaics for All, a grant of €250 per kW and a maximum grant of €1,000 (4kW). Additionally, citizens without the initial capital can benefit from this category, with an extra aid of €4,000 for a PV system at a maximum cost of €5,000. The additional aid will need to be paid back to the government.

B1: Roof insulation – General, includes a 50% grant and a maximum grant of €2,500 and/or €25 per sqm. This grant sees a 50% increase for homes located in mountainous regions.

B2: Roof insulation – Vulnerable households, presents a 75% grant and a maximum grant of €3,750 or €37.50 per sqm.

Changes

Compared to the previous 2022–2023 grant scheme, the new initiative incorporates some changes:

The introduction of Category A3: Photovoltaics for All, allowing citizens without initial capital to install a PV system.

Applicants approved under the ‘Photovoltaics for All’ category by the RES and Energy Fund can proceed with installation without initial capital, and the repayment of the system, with monthly instalments of €150, which will commence from the first day of connection, payable through the EAC electricity bill. The subsidised cost is set at a €1,000 grant and aid of €4,000 for a PV system at a maximum cost of €5,000.

The creation of a new special Category B2: Roof insulation for vulnerable households with increased subsidy.

Provision for a one-off bonus of €750 if both PV and roof insulation investments are implemented in the same house.

Modification of the implementation and application procedure, transitioning to electronic processing to streamline the application process and expedite grant payments.

Installation tasks will be entrusted to contractors registered in the ‘Participating Traders’ list (that will be listed on the RES and Energy Conservation Fund website), offering applicants a seven-year commercial guarantee, thereby enhancing the investment’s viability.

All potential beneficiaries will undergo pre-approval before the investment implementation, ensuring applicants of grant eligibility and providing promoters with enhanced control, significantly expediting grant payments. This procedural change aims to reduce bureaucracy for applicants and enhance the efficiency of the overall scheme.

Further reading

Grant Plan: To Encourage the Use of Renewable Energy Sources and Energy Saving In Residences 2024-2025 (Greek)

Grant Plan: To Encourage the Use of Renewable Energy Sources and Energy Saving In Residences 2024-2025 (English)

Market-driven property price reductions may be short-lived

Kyriacos Nicolaou
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Market-driven property price reductions may be short-lived

The Cyprus property market appears poised for a challenging year, marked by organic, market-driven price reductions, which may be offset by supply chain disruption, stemming from geopolitical conflicts, according to the president of the Cyprus Council for Registration of Real Estate Agents Marinos Kyneyirou.

In a recently published piece of analysis, Kyneyirou said that 2023 was expected to be difficult due to the many issues that persisted from 2022.

“We can still see that the lingering effects of the 2020-2021 pandemic and the eruption of the conflict in Ukraine in February 2022 continue to cast a shadow on the market,” he said.

Moreover, the persistently high inflation triggered significant interest rate hikes by the European Central Bank (ECB) throughout 2023.

This resulted in a continuous rise in borrowing costs until October when interest rate increases halted.

At the same, he added, construction material costs remained elevated compared to pre-pandemic levels.

“Despite these challenging conditions, the real estate sector demonstrated resilience, showcasing its ability to thrive in adversity,” Kineyirou said, citing data from the Department of Lands and Surveys, which is regularly processed and presented quarterly by the Council for Registration of Real Estate Agents.

According to the data, the first nine months of 2023 witnessed a total of 8,681 property transfers, amounting to €1.4 billion, and 9,374 sale agreements with a total value of €3.3 billion.

However, in the fourth and final quarter of 2023, the council expects to see figures that reflect a market downturn.

“In our view, the primary factor influencing demand, both domestically and from international buyers, is the soaring property prices,” he said.

“It is essential to note that property prices for sale or rent are not determined by real estate agents but rather by property owners,” he added.

Moreover, he said that recent Eurostat findings reflect a decreasing percentage of Cypriots who are able to acquire their own homes.

“Many individuals are returning to their parental homes due to challenges in purchasing or renting,” Kineyirou stated.

“The increased cost of living, high property prices, and elevated loan costs often lead banks to deem young couples seeking loans for property acquisition as financially unsustainable,” he added.

Furthermore, Kineyirou reiterated that “we had previously warned both the current and past government that as housing prices rise, more people will turn to renting, exacerbating the issue”.

He explained that this problem is becoming worse due to a new trend where property owners opt for short-term leases.

“Unfortunately, we are currently witnessing what we had predicted, with rental prices reaching levels requiring even a monthly wage for accommodation,” he said.

Meanwhile, the council president explained that under normal circumstances, the council expects that in 2024, market forces will come into play, leading to some reductions in residential and apartment sale prices, primarily through offers and discounts.

“Already, there have been some movements by property owners in this direction, attempting to stimulate buyer interest and sell their properties,” he said.

However, he warned that uncertainties loom over 2024, given the ongoing conflict in Ukraine and the recent developments in Gaza.

He noted that concerns are growing further as reports and statements leave the possibility of the war expanding to Lebanon.

At the same time, he continued, the supply chain is being affected by the Houthi attacks in Yemen, disrupting the smooth operation of the Suez Canal.

“It is evident that the repercussions of the dramatic reduction in ship transit through the Suez Canal will soon be felt in the Cypriot economy, particularly in the real estate market,” Kineyirou said.

“A potential increase in the prices of raw materials and construction supplies could likely keep property prices, especially for newly built properties, at elevated levels,” he concluded.

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Bill to halt auctions for ‘Mortgage-to-rent’ applicants passed

Elias Hazou
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Bill to halt auctions for ‘Mortgage-to-rent’ applicants passed

By a unanimous vote the House on Thursday passed legislation that provides for halting the auctioning off of properties where the mortgage debtor has applied for the ‘Mortgage-to-Rent’ scheme.

It concerns auctions on first dwellings.

And under an amendment that also passed, suspending these auctions was expanded to include debtors who applied to the ‘Mortgage-to-Rent’ but were turned down. If an individual has appealed their rejection, and for as long as the appeals process is ongoing in court, they are likewise protected from having their property auctioned off.

Tabled by a group of Akel MPs, the legislation aimed to amend the main foreclosures law, affording additional legal recourse to debtors so that they’re able to set aside the sale of a mortgaged property.

Speaking on the House floor, Akel MP Andreas Pashiourtidis said this gives extra protection to people at risk of losing their homes. Even though banks have given verbal assurances not to foreclose on properties, he said, anecdotal evidence suggests otherwise.

Under a mortgage-to-rent scheme, intended to help homeowners at risk of losing their property due to mortgage arrears, a person voluntarily surrenders ownership of their home for five years to their lender. An entity – in this case the state-owned asset management company Kedipes – buys the home from the lender and becomes the landlord. During that time, the borrower no longer owns their home but will continue living in it as a tenant.

Furthermore, the scheme stipulates that applicants who meet the basic criteria – provided they have a title deed – will transfer the title to Kedipes, which at the same time will sign a 14-year rental contract with the individual concerned.

Moreover, under this plan, the state will cover the rent for a period of 14 years, with an option for the previous owner to re-acquire the property after five years.

This gives the tenant, meaning the previous owner, or a first-degree relative, the right to repurchase the residence.

Also eligible are borrowers with a primary residence valued up to €350,000 which was previously considered non-viable for inclusion in other housing schemes, such as the ‘Oikia’ initiative, as well as individuals whose participation in such housing schemes has expired or ceased.

The ‘Mortgage-to-Rent’ scheme was launched in early December 2023. At the time of the rollout, Kedipes – in charge of implementing the scheme – said hundreds of people called to enquire about it.

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Another Limassol balcony collapses

Jean Christou
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Another Limassol balcony collapses

A balcony collapsed and fell from an apartment building in Germasogeia early on Friday morning, just over a month after a previous incident, also in the Limassol area.

No one was injured on Friday as the collapse happened just before dawn.

Parts of the stone from the building on Georgiou A Street fell onto a municipal path leading to a beach area that normally has heavy footfall.

Christos Papamichael a local councillor in Germasogeia posted photos on Facebook.

“Luckily we did not mourn victims as the balcony in question is bordered by a pedestrian path leading to the beach and is used daily by many citizens,” he posted.

Photo credit: Christos Papamichael

“The fall of the balcony highlights again the urgent need to take immediate and drastic measures to ensure the protection of the public with most important of all the implementation of a legislative regulation on the regular inspection of buildings.”

He added that the technical chamber ETEK had repeatedly submitted “important and well documented suggestions on this issue and the state should finally take them seriously and take on its responsibilities”.

There have been several incidences of balconies falling in recent years. The last one was on December 13, again in Limassol, prompting more calls from civil engineers for lawmakers to create legislation for regular building inspections.

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