Homes under the hammer

Nigel Howarth
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Homes under the hammer

Following the ending of the freeze on repossessions at the end of January 2023, lenders sent hundreds of letters to defaulting borrowers repossessing their homes and putting them under the hammer.

The letters, which informed borrowers that their homes would be repossessed and auctioned were sent in the space of just two months and involved 252 homes with a total value of €65 million.

However, when they went under the hammer a mere 11 of the 252 were sold, of which seven were villas. These 11 were bought by third parties or the lender following six months from the conclusion of the repossession process.

Information from the Central Bank of Cyprus indicates that the banks and debt purchasing companies broke their promise not to repossess and auction residences valued at less than €350 thousand.

Real estate buyers in Cyprus are struggling

Marinos Kyneyiros MRICS
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Real estate buyers in Cyprus are struggling

Prices in the Cyprus real estate market have been going up in recent years. This increase is mainly due to higher costs of construction materials and growing demand. As a result, both rent prices and home/apartment sales are on the rise.

Lately, it has become noticeable that many property owners, land developers and individuals are asking for unusually high selling prices and significantly higher rents for their properties.

With our extensive experience in the Cypriot real estate market, we can distinguish when prices make sense, align with data, or become unreasonable. While we have previously discussed the impact of increased demand and reduced supply on real estate prices, there are currently some prices that do not conform to the traditional and logical trends of the Cyprus real estate market.

The Central Bank of Cyprus data for the first quarter of 2023 are revealing. Their House Price Index indicates a 7.7% increase compared to the same quarter last year. Specifically, house prices have risen by 6.6% annually, and apartments have seen an 8.4% increase. These increases are significant, considering, for example, that an apartment that was valued at 150,000 euros in the first quarter of 2022 now sells for €163,000, and a house that was €250,000 now goes for €265,000.

This situation raises concerns especially because higher interest rates are making it more challenging for people to afford buying a house or apartment. Additionally, rising rental rates are straining the finances of tenants, causing them significant problems.

Real estate agents, who regularly interact with sellers, buyers and tenants, often face complaints about the prices being offered. In recent months, many colleagues have received criticism from potential buyers and tenants. It is important to note that real estate agents do not set the selling or rental prices for apartments and houses.

As the Estate Agents Registration Council, we are committed to clarifying these roles in the property market in the near future. However, excessive price increases should not be left to chance, as they can harm the entire sector and the economy.

About the author

Marinos Kyneyiros MRICS, is the president of the Real Estate Agents Registration Board of Cyprus.

Article originally published in ekathimerini.com

Property sales reach €0.5bn in Limassol in Q2 2023

Ask Wire Team
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Property sales reach €0.5bn in Limassol in Q2 2023

A total of 1,383 properties worth a total of €437.9 million were sold in Limassol in the second quarter of 2023 according to Ask Wire, a company that combines expertise in the real estate sector with the use of technology.

As can be seen from the analysis of the data, during the reporting period, 499 apartments, 271 houses, 430 fields and 183 plots were sold in the city and district of Limassol. The value of the apartments sold reached €197.2 million, the houses €115.8 million, the fields €75.5 million and the plots €49.35 million.

Apartments

Limassol gathered 26.6% of the volume of apartment sales in Cyprus. The greatest interest of buyers in the Limassol district is focused on apartments worth €100,000 – €500,000 as eight out of ten apartments were sold at these prices. In particular, 29.9% of sales concerned apartments worth €100,000 – €200,000, 27.9% apartments worth €200,000 – €300,000 and 24.4% apartments worth €300,000 – €500,000. In Limassol, 29 apartments worth more than €1 million were sold. The most expensive apartment was sold for €10.3 million.

Limassol apartment sales 2023

Houses

Most house sales in the Limassol district concerned values of €300,000 – €500,000. At these prices, 78 houses were sold, corresponding to 28.8% of the total. 15 houses were sold for values over €1 million, with the most expensive being sold for €10 million. The purchase of houses in the Limassol district in the 2nd quarter of the year corresponds to 26.9% of the total volume of sales in Cyprus and to 35.8 % of value.

Limassol house sales

Fields

Almost seven out of ten plots sold in the second quarter of 2023 in the Limassol district were worth up to €50,000, while most of them (242 plots/ lots) were sold at prices below €25,000. In the analysis of sales based on the area, it appears that ¼ of the sales correspond to fields up to 1000 square metres. A total of 68 fields were larger than 10,000 square metres. Limassol collected 34.6% of the volume and 46.7% of the value of Cyprus-wide field sales.

Limassol field sales

Plots of land

The province of Limassol gathered 28.7% of the volume and 38.6% of the value of plots sold throughout Cyprus during the second quarter of the year. One out of every two plots sold was worth €50,000 – €200,000, while the most expensive plot was sold for €5.9 million. In Limassol, 51 plots of land over 1000 square metres were sold, a number that corresponds to 27.9% of the total.

Limassol plot sales

Commenting on the findings, Pavlos Loizou, CEO of Ask Wire, said that “the analysis of the data concerning the Limassol district confirms its distinctiveness compared to the other districts of Cyprus’ government-controlled areas.

“At the same time, it also confirms its significance for the real estate market and the country’s economy,” Loizou stated.

“It is also evident that there is an increased cost for property acquisition due to the city’s role as a business centre hosting dozens of foreign companies with thousands of employees,” he added, while also noting that “many apartments and houses are being sold at prices exceeding €1 million”.

Apartment blocks offset decrease in total projects

Kyriacos Nicolaou
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Apartment blocks offset decrease in total projects

The Cyprus construction sector saw a 16.5 per cent increase in the total value of building permits during the first half of 2023, as well as a 3 per cent increase in their total area, according to a report released this week by the Cyprus Statistical Service (Cystat).

The increase in the value and total area of building permits comes despite a 7.4 per cent year-on-year decrease in their overall number.

The rise in the number of residential units is attributed solely to the increase in residential multi-unit buildings.

During the period of January to June 2023, municipal authorities and district administrations issued 3,608 building permits, down from 3,898 in the corresponding period of 2022, marking a 7.4 per cent decrease.

However, the total value of these permits increased by 16.5 per cent, and the total area increased by 3.0 per cent.

The number of residential units increased by 2.6 per cent, primarily due to a 17.6 per cent increase in residential multi-unit buildings compared to the same period in the previous year.

On the contrary, single-unit residences decreased by 9.4 per cent, duplexes by 20.9 per cent, and mixed-use multi-unit buildings by 45.2 per cent.

Specifically, in the first half of 2023, the number of permits issued for residential buildings decreased by 8.2 per cent compared to the first half of 2022.

In addition, permits for non-residential buildings decreased by 9 per cent, and permits for civil engineering projects decreased by 21.1 per cent.

Meanwhile, land divisions increased by 3.7 per cent, and road construction increased by 30.1 per cent.

Meanwhile, in June alone, according to the Cyprus Statistical Service, the number of building permits issued by municipal authorities and provincial administrations reached 610, compared to 626 in June of the previous year.

The total value of these permits amounted to €251.1 million, compared to €220.05 million in June of the previous year, with a total area of 200,500 square meters, down from 202,070 square meters.

These permits are expected to result in the construction of 1,141 residential units, while in June 2022, 1,146 units were projected.

Excluding Larnaca, the number of building permits decreased in all other districts during the first half of the year compared to the same period in 2022.

Specifically, in Nicosia, the number of building permits decreased to 1,312 from 1,424, in Limassol to 1,060 from 1,141, in Paphos to 481 from 563, and in Famagusta to 143 from 210 during the same period last year.

In contrast, in the Larnaca district, the number of building permits increased to 612 from 560 in the first half of 2022.

Finally, statistical service noted that building permits serve as a significant indicator for future activity in the construction sector.

Sales to non-EU citizens reach one third of total sales

Nigel Howarth
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Sales to non-EU citizens reach one third of total sales

During August, one third of all property sales in Cyprus (as assessed by the number of contracts deposited at Land Registry offices) were purchased by non-EU citizens, according to official statistics published by the Department of Lands and Surveys.

Market segment analysis

Property sales to non-EU citizens

Sales to non-EU Nationals rose 34% compared to August 2022 and accounted for 30% of the total number of sales achieved during the month.

Although sales in Limassol fell by 15%, they rose in the remaining four districts.

Paphos recorded the highest number of sales, followed by Larnaca, Limassol, Famagusta, and Nicosia.

Sales to non-EU citizens
Overseas (non-EU) Sale Transactions – 2022/2023 Comparison

Sales to non-EU nationals during the first eight months of 2023 reached 3,385, a 76% increase on the 1,921 achieved in the same period last year.

Property sales to EU citizens

Sales to EU nationals continued to fall, dropping 16% compared to August 2022, with sales falling in all districts with the exception of Larnaca and Nicosia, where they rose by 35% and 22% respectively.

Paphos achieved the greatest number of sales, followed by Limassol, Larnaca, Famagusta, and Nicosia.

Property sales to EU citizens
Overseas (EU) Sale Transactions – 2022/2023 Comparison

Sales to EU nationals during the first eight months of 2023 reached 1,300; a fall of 22% compared to the 1,657 achieved in the first eight months of 2022.

Total property sales to the overseas market

Sales to foreigners (both EU and non-EU citizens) were up 34% compared to August 2022, despite the 16% fall in sales to EU citizens.

Sales rose in all districts with the exception of Limassol, where they fell by 15%.

Paphos recorded the greatest number of sales, followed by Larnaca, Limassol, Famagusta, and Nicosia.

Property sales to foreign citizens
Property sales to the overseas market – 2022/2023 Comparison

Foreign real estate sales during the first eight months of 2023 reached 4,685; a 31% increase on the 3,578 achieved in the same period last year.

Property sales to the domestic market

Real estate sales to the domestic market in August rose 19% compared with August 2022 but with Limassol reporting a fall of 4%.

Despite its fall, Limassol recorded the greatest number of sales followed by Nicosia, Larnaca, Paphos and Famagusta.

Domestic sales
Domestic Sale Transactions – 2022/2023 Comparison

Sales to the domestic market during the first eight months of 2023 stood at 5,498; an increase of 13% on the 4,875 achieved during the same period last year.

Sales 2008 - 2023

Authorities scratching heads over Pissouri landslide

Editorial
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Authorities scratching heads over Pissouri landslide

The chronic issue of land subsidence in Pissouri continues to escalate, as a landslide upend the lives of residents.

The matter has occupied the attention of the Ministry of Interior in recent days, leading to a meeting involving the Ministers of Transportation and Agriculture.

During the meeting, the formation of an inter-ministerial committee under the supervision of the Department of Geological Survey, which falls under the Ministry of Agriculture, was agreed upon.

collapsing flats
Photo credit: Fight For Pissouri

In response to the new landslide, which emerged two years ago at the core of the community, the Department of Geological Survey has undertaken the preparation of a comprehensive study covering the entire Pissouri area. This study will encompass not only the “Limnes” region, where construction works for housing developments have taken place, but also the heart of the village itself, aiming to shed light on the extent of the problem. Subsequently, measures will be taken for both areas.

According to Philenews, the Department of Geological Survey is considering summoning a team of international experts to conduct an on-site assessment. Depending on the study’s findings, which are expected to take eight months, decisions will be made regarding the potential partial relocation of residents and soil stabilisation efforts as needed. Furthermore, the study will determine how many residences are at risk and whether evacuations are warranted.

Furthermore, evacuation orders have already been issued for five homes. Simultaneously, the Limassol District Administration, following the recommendations of the Department of Geological Survey, is conducting inspections of residences affected by the instability. The goal is to assess the suitability for habitation and, where deemed necessary, issue evacuation orders to protect residents.

Photo credit: Fight For Pissouri
Photo credit: Fight For Pissouri

An area of around 500,000 m2 is affected by significant erosion and landslides in Pissouri. The issue was revealed after heavy rainfall in June 2012. A 2015 study showed that the problem is caused by groundwater trapped in land, which used to be lakes, and unchecked human intervention, specifically embankment work.

As a result around 75 housing units are now affected and many have sustained significant damage.

Photo credit: Fight For Pissouri

The Interior Ministry has previously said that responsibility for the problem rests on the shoulders of the civil engineers appointed by the development companies which built the houses.

The engineers did not conduct the necessary studies and took false conclusions into consideration.

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