Demand for Cyprus real estate remains high

Editorial
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Demand for Cyprus real estate remains high

According to data from the Comparative Sales Department of the Land Registry and Cartography, processed and presented on a quarterly basis by the Real Estate Registration Council, the real estate market continues to be resilient to challenges.

In particular, the nine-month period of the year saw a total of 8,681 property transfers nationwide with a total value of €1.4 billion and 9,374 sales documents with a total value of €3.3 billion.

Marinos Kineyirou, the President of the Real Estate Registration Council, stated, “It is with great satisfaction that we observe the Cypriot real estate market achieving remarkable performances despite the prevailing negative environment. External demand combined with the maintenance of domestic demand at good levels create expectations for another positive year in the real estate sector.”

Limassol leads

Limassol district confirms its status as the driver of the Cypriot real estate market, registering the highest number of sales documents (3,435) and ranking just behind Nicosia in the number of property transfers (2,334). In terms of values, it is the strongest district, having transferred properties worth €462 million and sales documents worth €1.85 billion in the nine-month period.

The two faces of Nicosia

Nicosia district records the highest number of property transfers (2,937) in the nine-month period and follows Limassol in terms of values, amounting to €409 million.

However, the analysis of sales documents during the nine months reveals a significant decline for Nicosia, both in transaction volume (1,673) and values (€382 million), placing it in the fourth position, behind Limassol, Paphos, and Larnaca.

Paphos maintains momentum

The Paphos district continues to maintain its momentum in the real estate market for over a year, recording 1,063 property transfers worth €165.3 million and 2,027 sales documents worth €632 million in the nine months of 2023.

In terms of transfer values, Paphos ranks fourth, but in sales document values, it stands second, comfortably ahead of Larnaca and Nicosia.

Larnaca on the rise

Larnaca district demonstrates significant achievements in the real estate market in recent months, reflected in the comparative sales for the nine-month period.

With 1,850 property transfers worth €266 million and 1,892 sales documents worth €383 million, it secures the third position in the reported period.

Steady performance in Famagusta

Despite its small size, the real estate market in the free district of Famagusta demonstrates stability during the January to September 2023 period, with a total of 497 property transfers worth €93 million and 347 sales documents worth €82 million.

© 2023 In-Cyprus.com

 

Climate changing real estate

Kyriacos Kiliaris
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Climate changing real estate

Climate change is reshaping the world in extreme ways, and one industry feeling the heat, quite literally, is real estate.

Cyprus is grappling with the impact of climate change, compelling local stakeholders to adapt to new challenges and embrace the rules dictated by environmental shifts.

The Cyprus Property Valuers Association is organising a seminar in Nicosia on December 8 to proactively address the evolving climate scenario.

The seminar delves into how Environmental Social Governance policies will shape the future of the valuers’ profession, focusing on the challenges posed by climate change for the real estate sector.

One major concern for the industry is the escalating hazards brought about by climate change, subsequently impacting building costs and, consequently, potential buyers.

The looming increase in costs poses difficulties in securing funding, adding a layer of complexity to an already dynamic market.

While the risks of rising sea levels and temperatures may seem like a scenario from a distant or dystopian future, the potential toll on Cyprus’ towns, especially coastal ones, cannot be ignored.

Coastal properties face heightened risks as sea levels rise due to melting ice caps and glaciers, prompting investors and homeowners to grapple with the spectre of more frequent and severe flooding, leading to potential declines in property values and increased insurance costs.

The recent devastating floods in Greece are a poignant reminder of the destructive power of extreme weather events, causing widespread damage to farmland, infrastructure, and livelihoods.

Closer to home, the placement of homes near riverbeds and concerns for coastal areas like Larnaca, Limassol, and Paphos underline the urgency for climate resilience measures in property developments.

In response to the uptick in extreme weather events, industry stakeholders report a shift in geographic preferences for real estate investments.

Areas with more temperate climates and lower vulnerability to extreme weather are gaining traction, leading to the emergence of climate-conscious property markets.

The global focus on carbon emissions has prompted regulators to impose taxes or penalties on non-compliant landlords.

Carbon neutrality

EU regulations further mandate adopting green building policies in the construction industry, accounting for a significant portion of energy consumption and greenhouse gas emissions.

This shift towards energy efficiency and carbon neutrality has implications for Cyprus and Greece’s real estate, particularly for ageing buildings requiring energy upgrades.

If enacted into local law, the new regulations would necessitate zero-emission status for all new buildings from 2028, with specific deadlines for public authorities.

Equipping new buildings with solar technologies and incorporating energy-efficient measures during major renovations will become imperative, in line with the growing demand from climate-aware consumers.

Developers respond to this demand by incorporating green building standards such as LEED certification.

The energy efficiency of a building not only aligns with environmental values but also impacts the property’s overall value, appealing to an expanding market of eco-conscious buyers.

Staying abreast of these changes is crucial for real estate professionals to assess climate-related risks associated with their property portfolios accurately.

While posing challenges, energy efficiency regulations also present opportunities for real estate investors.

Properties suitable for solar and wind energy projects are gaining value, opening doors for collaborative efforts with renewable energy companies to create integrated, eco-friendly communities.

Surveys have also shown that, despite a higher initial construction bill, energy costs can be reduced by 20%-40%, water consumption by 10%-30% and maintenance costs by 10%-15% (thus reducing operating costs by up to 20% ).

It allows paying more expensive rents at 10-20%, compared to a conventional building.

The real estate sector in Cyprus stands at the forefront of climate change impacts, necessitating adaptation for long-term sustainability.

While costs and challenges may rise, embracing green building practices and incorporating climate resilience into developments offer avenues for sustainable solutions that will shape the market’s future in Cyprus and around the globe.

The Property Valuers Association of Cyprus seminar, “The Real Estate Market of Cyprus and Greece – Modern Appraisal Approaches”, takes place on December 8, 2023, at the Head Offices of Altamira, in Latsia in Nicosia.

The Association has curated an extensive presentation on modern valuation approaches and current trends in the real estate market, featuring distinguished speakers with expertise in the field.

The lineup includes professionals spanning various domains, from scientists and researchers to industry practitioners.

Each speaker brings a unique perspective and valuable insights to enhance our understanding of valuations and real estate dynamics.

Subjects include ESG policies and implementation of practices to counter climate change to how AI will affect the future of real estate in Cyprus and the world.

 

The Financial Mirror sponsors the seminar. 

The cost of participation is €60 for members of the Association who have settled their debts for 2023. For non-members the cost is €100.

Subscriptions can only be paid through the JCC website.

Foreclosures laws to be discussed in parliament

Editorial
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Foreclosures laws to be discussed in parliament

Today marks a crucial development in the landscape of property foreclosures as the Parliament is set to deliberate on two governmental bills aimed at fortifying the legal framework surrounding foreclosures.

The objective is to bring these legislations to the Plenary on the upcoming Friday, which is the last scheduled session before the Parliament adjourns for the Christmas holidays.

The suspension of foreclosures for primary residences valued at €350,000 will expire at the end of the month.

To avoid extending the freeze on foreclosures, the legal framework must be strengthened. A focal point seems to be the draft law on Special Jurisdiction, known as the Foreclosures Court, which will be discussed this morning in a joint session of the Parliamentary Committees on Finance and Legal Matters.

Due to reservations expressed by AKEL, the Green Party, and the governing parties, amendments are expected to be proposed.

Additionally, today’s agenda includes the conclusion of the discussion on the bill regarding the expansion of the powers of the Financial Commissioner. Yesterday, the government coalition parties – DIPA, DIKO, and EDEK – submitted two legislative proposals to the Plenary, reinforcing the rights of borrowers addressing the Financial Commissioner for auction-related matters and non-performing loans secured by a primary residence.

The specific proposals prepared by the Ministry of Finance will strengthen the bill concerning the expansion of the Commissioner’s powers.

In particular, the legislation, endorsed by MPs Christiana Erotokritou (DISY), Elias Myrianthous (EDEK), and Alekos Tryfonides (DIPA), entails an amendment to the Law on the Transfer and Mortgage of Immovables to safeguard the rights of mortgage debtors of primary residences.

With the second legislative proposal, the powers of the Financial Commissioner are extended for out-of-court dispute resolution within 45 days between mortgage lenders and mortgage debtors regarding the amount declared by the mortgage lender in the “IA” notification during the foreclosure of a primary residence valued up to €350,000.

It is further stipulated that the right to appeal to the Financial Commissioner is granted to all mortgage debtors of existing non-performing loans with a primary residence value of up to €350,000.

Simultaneously, mortgage debtors of new non-performing loans who do not cooperate with authorized institutions, as specified by the Central Bank’s Code, are not eligible to appeal to the Commissioner as they are not considered eligible debtors.

© 2023 In-Cyprus.com

Nicosia property sales hit €164.9 million in third quarter

Kyriacos Nicolaou
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Nicosia property sales hit €164.9 million in third quarter

The Nicosia district saw residential sales totalling €118.8 million during the third quarter of 2023, according to a report released on Wednesday by Cypriot firm Ask Wire.

Ask Wire, a firm that combines real estate market knowledge with technology, provided an extensive analysis of property market transactions in Cypriot capital during the third quarter of 2023, offering comprehensive data on sales volume and value.

The report noted that a total of 1166 properties across the four main categories – houses, apartments, plots, and fields – were sold, with a total value of €164.9 million.

Breaking down the figures, the city and the Nicosia district witnessed the sale of 492 apartments, 160 houses, 312 fields, and 202 plots.

Apartment sales accounted for €81.6 million, houses at €37.2 million, fields at €14.1 million, and plots at €32 million.

The company noted that the Nicosia district took the lead nationwide in apartment sales during the third quarter, encompassing 28.6 per cent of total property sales.

In more detail, apartments priced between €100,000 and €200,000 saw the most traction, accounting for nearly six out of ten apartment sales.

Half of the house sales in Nicosia district (81 out of 160) were in the price range of €100,000 to €300,000.

Notably, two houses were sold for over €1 million, signifying 19.4 per cent of the total sales volume and 15 per cent of the total value.

What is more, eight out of ten fields sold in the third quarter of 2023 in the Nicosia district were valued at up to €50,000. The majority of these transactions (193 fields) occurred below the €25,000 mark.

Moreover, more than half of the sales corresponded to fields measuring up to 3000 square metres, while 30 fields exceeded 10,000 square metres.

Nicosia accounted for 25.2 per cent of the sales volume and 10.7 per cent of the value of field sales nationwide.

Furthermore, the Nicosia district leads the country in land sales, representing over one-third of the transactions in the third quarter.

Six out of ten plots sold fell within the range of €50,000 to €200,000. Plots measuring between 400 and 600 square metres dominated sales, comprising 39.1 per cent of the volume.

Commenting on the above data, Pavlos Loizou, Chief Executive Officer of Ask Wire, stated, that the analysis concerning the Nicosia real estate market has resulted in some interesting findings, both for the city and the district as a whole.

“The total volume of transactions is significantly influenced by land sales (44 per cent of the total), although the value of these transactions amounts to only 28 per cent,” Loizou said.

“Additionally, transaction values are notably increased, especially in apartments (49 per cent), where 60-65 per cent of the population resides,” he added.

“As we have reiterated many times recently, this type of analysis enables suitable conclusions to be drawn by investors, sellers, and banks, allowing them to base their decisions on real data,” Loizou concluded.

Real estate warning amid Middle East uncertainty

Editorial
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Real estate warning amid Middle East uncertainty

The Finance Ministry has painted a sombre picture for the local real estate sector should the crisis in the Middle East be prolonged, contrary to the outlook issued by the Central Bank, which anticipates moderate growth.

According to the head of the economic policy unit of the Finance Ministry, Dionysis Dionysiou, the authority estimates the ongoing war in Gaza is “not only intensifying the uncertainty in the region but the situation is also expected to take a toll on international energy prices and supply chains”.

In relation to the real estate market, concerns are focused on the possible time frame of the crisis in the Middle East.

The Finance Ministry’s official argued the negative impact of the war in Gaza was sharply felt at the earlier stages of the conflict, but things stabilised soon after.

“At the present stage, Israeli investors’ steady investment activity in the real estate sector is visible; however, the scenario of a prolonged crisis in the region, the property market, will be negatively affected,” said Dionysiou.

“Israelis make up a significant share of the foreign buyer market”.

The Central Bank of Cyprus (CBC) does not appear to be on the same page as the Finance Ministry, noting slight optimism for the sector in its report.

According to the CBC, Cypriot companies of Israeli interests established on the island thanks to incentives to attract international companies.

These companies, noted the CBC, have invested in real estate and are not expected to carry out mass real estate sales.

Due to Cyprus’ security and political stability, the CBC does not rule out the continued demand for real estate from Israeli citizens and companies.

It is also reported that Israelis are making exploratory moves, both for commercial and residential properties, with a shift for the time being to property rentals.

Last week, the ECB warned that property companies in the eurozone are suffering from mounting losses, and some will struggle to service their debts, which have risen to levels higher than before the 2008 financial crisis.

The losses, cited by the ECB, stem from significantly higher financing costs, falling commercial property values, lower rental income, and growing concerns about the energy efficiency of buildings.

However, the latest Land Registry data on sales documents for the first 10 months of 2023 reflect the resilience of the real estate sector, although players have expressed concern over market overheating.

According to the data, the first ten months were the best for the industry since 2008, when sales reached 13,261 units.

Ten-month sales documents reached 12,825 units, from 10,781 last year, marking an increase of 36.2%.

Mortgage-to-rent scheme effective in December

Nikolaos Prakas
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Mortgage-to-rent scheme effective in December

The mortgage to rent (MtR) scheme for vulnerable borrowers will come into effect on December 4, finance ministry permanent secretary George Panteli said on Friday, presenting the scheme at a press conference.

He added that it will come into effect in December, since the parliament has not yet officially passed the bill, and its discussion is scheduled for next Monday so that it can be sent to the plenum for a vote next Thursday.

Under a mortgage-to-rent scheme, intended to help homeowners at risk of losing their property due to mortgage arrears, a person will voluntarily surrenders ownership of their home for five years to their lender. An entity 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.

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

Panteli said that the fiscal cost of the scheme is estimated at €200 million over the next two years, which corresponds to 0.9 per cent of GDP.

In his speech, Finance Minister Makis Keravnos said that the MtR scheme complements the package of measures submitted by the government for the management of non-performing loans.

He called on vulnerable groups to take advantage of the opportunity offered to them, “which we consider to be a way out of the problem they are facing”.

The cabinet approved the scheme back in July 2023.

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