Inspecting resale properties – part 6

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When buying a resale property in Cyprus (or anywhere else for that matter) you need to consider a number of aspects. As well as inspecting properties to ensure they are satisfactory and meet your requirements, it is important to look at:

Finance

This seems obvious, but some people buy more than they can afford and run into financial difficulties. As well as the actual sales price, you need to consider the running costs such as electricity, water, telephone, taxes, repairs and maintenance, etc.

The resale property you’re looking to buy may need some renovation. Get firm, written quotations for any renovation and remedial work needed.

You would also do well to speak with the estate agent who is marketing the property, see my top 8 questions to ask estate agents. The answers to these questions and the cost of any repairs and refurbishments (see using professionals below) will put you in a better position to negotiate the price.

Communal fees

If you’re looking to buy an apartment or any type of resale property on a complex with shared facilities, such as a swimming pool, you’ll need to pay communal fees towards the upkeep, repair, insurance and management of what is known as the ‘jointly-owned-building’. (The jointly-owned building includes everything within the boundary walls of the development – including the individual dwellings.)

In its present form, the jointly-owned building law is effectively unworkable and is in dire need of fundamental change. All too often problems arise as owners refuse to pay their communal fees, which means that those who do pay have to cover the shortfall. This causes resentment and often leads to a domino effect as more owners refuse to pay and the development falls into disrepair and decay. Although the building’s Management Committee can sue the non-payers to recover what they owe plus legal and court fees: (a) it’s expensive (b) the case can take years to be heard (c) even if the case is won, enforcing the court judgement can prove ‘difficult’. (d) if the debtor can prove they’re in financial difficulties, the court may rule that the they repay the money owed over a number of years.

You should speak with the buildings management committee and inspect the accounts to ensure everything is in order.

(The problem of non-payers has been exacerbated by COVID-19 pandemic, which has reduced the ability to pay for many who have lost their jobs and/or are living on a reduced income.)

Using professionals

I always advise those looking to buy a resale property to have it checked out professionally before they make an offer. In the previous article I listed many of the aspects of the property that should be inspected by a suitably qualified professional. The list of RICS surveyors in Cyprus is a good starting point.

Title Deeds and other documents

Last, but no means least, is to check the documents associated with the resale property. These include its Title Deed, approved architectural plans, building and planning permits. If the Title Deed has not been issued, you should find out (a) what’s causing the delay and whether the local planning authority has issued a ‘certificate of approval’ confirming the property’s been built according to the permits and plans authorised for its construction.

You need to check that the approved architectural plans correspond to what’s actually been built. Some people add swimming pools, garages and other fixed structures or have extended the property without authorisation. Unauthorised changes to will cause problems if you wish to make changes to the property yourself and/or wish to sell the property at a later date.

Resale property inspection checklist

Finally, I have drawn up a 3-page property inspection checklist to record details of each resale property you view. I hope you find it useful.

Happy hunting!

 

 

 

Former MPs face prosecution over passport scandal

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Police are requesting the prosecution of former House Speaker Demetris Syllouris and ex-AKEL MP Christakis Giovani implicated in the golden passport scandal, which ended the citizenship for investment scheme.

Police have completed an investigation into the two former senior MPs and their involvement in offering Cyprus passports to criminals.

The case file has been handed to the attorney-general, who will decide whether there is enough evidence to take the case to court.

According to daily Phileleftheros, the police has recommended that the duo be prosecuted for corruption.

Police launched a probe in October last year following an Al Jazeera documentary, exposing the two as middlemen for dodgy foreign investors eyeing a Cypriot passport to gain access to the EU.

Al Jazeera’s expose showed reporters posing as fixers for a Chinese businessman seeking a Cypriot passport despite having a criminal record.

Parliament speaker Syllouris and the opposition MP were secretly filmed allegedly trying to facilitate a passport for the fugitive investor.

Prominent Famagusta lawyer Andreas Pittadjis also featured in the video, and others linked to Giovani’s property development company.

Both Syllouris and Giovanis later resigned, although both insisted they were innocent of any wrongdoing, claiming the video had been illegally recorded.

Until that time, the government had fiercely defended the citizenship scheme but was forced to scrap it, as the EU launched legal proceedings over claims it had been selling passports to dubious individuals.

A public inquiry found the government broke the law countless times to grant citizenship to over 6,700 people from 2007 to 2020.

The damning report said that over half (53%) of the 6,779 passports granted were done so illegally, encouraged by a due diligence vacuum or insufficient background checks.

Cyprus’ passport scheme generated over €7 billion during its lifespan from 2007.

Limassol property sales exceed €6.3 billion

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The three major municipalities of the Limassol District – the Municipality of Limassol, of Yermasoyia and of Agios Athanasios, gained a significant share of the real estate market over the past five years.

According to data processed by WiRE, the value of the transactions carried out during the past five years in the three Limassol municipalities exceeded €6.3 billion and their volume exceeded 14,000.

Meanwhile, the total value of transactions over the past five years across Cyprus reached €30 billion, whilst transactions exceeded 100,000 in total.

More specifically, in the Municipality of Limassol the value of the transactions exceeded €3.3 billion, and transactions amounted to 7900. The median price of the transactions amounted to €178,912, with a typical price range between €110,082 and €314,714.

Most sales in this municipality were recorded in 2018, when they reached 1781, while most transactions, 5485, were worth up to €260,000. Transactions of more than €1 million amounted to 625, of which 422 ranged from €1.5 million to €70.3 million.

Regarding the Municipality of Yermasoyia, the value of the transactions exceeded €2.1 billion, while transactions amounted to 4095. The median price of these transactions, however, was significantly higher than the corresponding one in the Municipality of Limassol, amounting to €341,431 we half recorded in the range of €161,113 to €598,725.

Most sales in this municipality were recorded in 2018, when they reached 940, while most transactions, 1786, were worth €123,000 to €443,000. A significant number of transactions (1187) concerned real estate with values ??between €443,000 and €959,000. Transactions worth more than €1 million amounted to 478, of which 192 ranged from €1.7 million to €21.8 million.

As to the Municipality of Agios Athanasios, the value of the transactions exceeded €800 million, and more than 2000 transactions took place. The average price of the transactions was €264,296, while the typical price range was €172,875 to €429,995.

Most sales in the municipality were recorded in 2019, when they reached 443, while most transactions (1054) were worth between €178,000 and €472,000. Transactions of more than €1.4 million amounted to 73, and €17.9 million was the highest price recorded.

Apartments own the Limassol pie

A common feature of the sales in all three major municipalities was that most of them concerned apartments.

Specifically, in the Municipality of Limassol, 4566 apartments with a total value of €1.5 billion were sold in the last five years, averaging €165,000.

In the Municipality of Yermasoyia, 2676 apartments were sold, amounting to €1.3 billion and with the average price at €363,458 euros.

As far as the Municipality of Agios Athanasios is concerned, 744 apartments were sold with a total value of €230 million, with an average price of €235,550.

To increase transparency and equal access to real estate market data, WiRE will periodically publish real estate market data to help interested buyers and investors in the sector make informed decisions. The company has piloted a data analytics tool which provides aggregated gate on more than 100,000 transactions and automated valuations of individual units in selected areas. It is freely available at https://goaskwire.com/.

Copyright © 2021 All Rights Reserved by WiRE FS

Our top 10 stories in 2021

Our top 10 stories for 2021 are set against a background of BREXIT and the on-going COVID-19 pandemic, which continues to disrupt the lives of everyone.

Cyprus is managing the pandemic very well and currently has 81 deaths per 100,000 of the population (the third lowest number in the European Union) compared with the UK figure of 220 despite having less that 50% of the population fully vaccinated.

As we approach Christmas and the New Year, here are the top 10 stories that have attracted the most interest from you, our readers, over the past 12 months:

Number1: Buying property in Cyprus and visiting post Brexit – When the Brexit transition period came to an end on 1st January 2021, UK citizens became “third country” nationals; a generic term describing the citizens non-EU member states.

As third country nationals, what Brits are permitted to purchase and the process of owning a property have changed.

Number2: Larnaca port and marina is a mammoth project – Following a three-year international public tender procurement, the Republic of Cyprus reached an agreement in March with a consortium known as Kition Ocean Holdings consisting of a Cypriot and an Israeli company, to redevelop and operate the historic Larnaca Port and Marina, the island’s largest infrastructure project of its kind.

Number3: How to get a license to rent your property – Renting your property in Cyprus is a good way to earn money while you’re not using it, but a law that came into force in January 2020 requires those wishing to rent their property as self-catering accommodation and short-term holiday rentals to obtain a license.

The new law 9(I)/2020 is designed regulate the operation and licensing of Self-Catering Accommodation in Cyprus.

Number 4: Pitfalls to avoid when buying property in Cyprus – Buying property in Cyprus can involve a number of pitfalls. Potential purchasers are advised to exercise extreme caution when buying property, especially if the title deed is not readily available, which is a common scenario when purchasing new property in Cyprus.

Number 5: Mistakes parents make transferring property – The wealth of most Cypriots (those who still have some) is mainly made up of immovable properties and cash.

So, when it’s time for them to transfer this wealth to the next generation, they usually make three important mistakes that have both financial and psychological consequences.

The first mistake when transferring properties to children has to do with the lack of preparation by the parents. (This story also applies to non-Cypriots who own property in Cyprus.

Number 6: Limni bay golf resort project cancelled – News that the Limni Resorts and Golf Courses, part of the Shacolas Group, announced that it did not intend to proceed with the controversial Limni Bay project. In a statement the company said:

“In view of the disposal of the property in the area of Limni, Polis Chrysochous, an area that covered the licenses issued for the creation of two golf courses and other developments, our Company does not intend to proceed with the development of the ‘Limni Bay’ project.”

Number 7: Tears of joy when viewing her ideal apartment – A story about a woman who broke down in tears when she and her husband were viewing a holiday apartment in Protaras with Scarlett Douglas in a scene from ‘A Place in the Sun’, probably without realising the problems that she and her husband might face.

Number 8: Will Cyprus real estate market hold in 2021? – The view of a Member of the Royal Institution of Chartered Surveyors (MRICS) and a Member of the European Real Estate Society on prospects for the Cyprus property market during the year ahead.

Number 9: Better days for the Cyprus property market lie ahead – A second story from the author of number 8 that the Cyprus property market would remain relatively stable in 2021. (Looking at the latest sales figures, he was correct.)

Number 10: Limassol high-rise building given green light – News that the Department of Environment had given the green light for the construction and operation of a 16-storey building in Germasogeia.

The proposed project, known as Dasoudi Residence, will be approximately 65 metres high and will include 29 apartments, two retail units, car parking, etc.

That concludes by top 10 stories for 2021.

Music video of the year

This year I’ve chosen a video of “The Sound of Silence“, which was written by Paul Simon Paul who took six months to write the lyrics, which are about man’s lack of communication with his fellow man.

Here is a powerful performance of the song by the heavy metal band Disturbed. (Regular readers will recall my music video of the year in 2019 was also The Sound of Silence by the American acapella group ‘Pentatonix’.)

May I take this opportunity to wish you all a
Merry Christmas and a Happy and Healthy 2022

Construction material prices onwards and upwards

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Construction material prices continued onwards and upwards in November as the global economy continues to pick up in the wake of the COVID-19 pandemic causing global demand to increase, which pundits have warned will threaten the sector’s recovery.

The Cyprus Statistical Service reports that, compared to November 2020, the Construction material price index recorded an annual increase of 17.89%; an increase 0.85% compared to the previous month.

Compared to November 2020, increases were recorded in:

  • Metallic products (34.41%) including iron and steel (48.48%)
  • Wood, insulation materials, chemicals and plastics (18.38%)
  • Electromechanical products (12.33%)
  • Minerals (5.20%) including Cements (9.22%)
  • Mineral products (4.52%)

The Cyprus Statistical Service notes that prices of materials used in construction are collected on a monthly basis based on a sample of products and suppliers. The reference date for the prices collected is the 15th of each month. Prices are valued excluding VAT. The data collection is carried out by telephone, fax or e-mail.

construction material price index

Prices of materials are based on actual prices rather than list prices.

Construction material costs – further reading

Press release: Price Index of Construction Materials: November 2021

Inspecting resale properties – part 5

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In the previous article I gave some advice on how to carry out an internal inspection of resale properties. In this article you’ll find specific advice on inspecting their kitchens and bathrooms.

The two major areas to scrutinise in kitchens are the plumbing and appliances – and for bathrooms, the plumbing and bathroom fittings.

Inspecting kitchens

  • While inspecting the kitchen, pay particular attention to the fittings and appliances, quality of the carpentry, and the amount of storage space. Also, keep an eye out for signs of water leakage. It may be easier to inspect the plumbing while visiting the smallest room in the house, but you should check it out in the kitchen as well.
  • Check the condition of the floor. Are there any signs of water leakage? (Look for discoloured grouting or paintwork).
  • Has the kitchen sink been sealed around its edges?
  • Check that the sink is fitted properly and is not loose (try rocking it) and that the taps are not loose and that they all work properly.
  • Check the sink for denting, chipping, discolouration and lime scale deposits. Do you recognise the brand name or is it one of the flimsy, cheap unbranded variety?
  • Does water run out of the sink quickly? If it is slow, the pipes may be partially blocked or too narrow.
  • Check under the sink to see if there has been any water leakage.
  • Check that the isolation taps (usually under the sink) are working.
  • Look at the appliances. Are they suitable, do they work? Are there any problems such as an oven door that will not open easily? Do you recognise the brand names?
  • Is there sufficient worktop and eating space?
  • Are the worktops marked?
  • Have the washing machine and dishwasher been plumbed in properly and connected to waste outlets?
  • Check the quality and condition of the kitchen cabinets.
  • Check that there’s sufficient storage space for your needs.

Inspecting bathrooms

It’s quite easy to spend a few minutes inspecting the bathroom without being rushed. Just say that you need to answer a call of nature and you’ll be shown to the smallest room in the house.

Don’t forget to lock the door behind you and flush the toilet before leaving!

  • Check the condition of the floor. Are there any signs of water leakage (look for discoloured grouting or paintwork)?
  • Is sanitary ware fitted properly? Is it loose (try rocking it)?
  • Are the taps loose? Do they work properly?
  • Check that the water isolation taps are working.
  • While checking the water isolation taps you should be able to check the type of plumbing, which will probably be pipe-in-pipe, copper, or grey plastic.
  • Manufacturers of quality sanitary ware and taps usually mark their equipment with their brand name and some other information. If you don’t recognise the name, jot it down and check it out later. If the sanitary ware and taps are not branded, they’re probably of average or poor quality.
  • While visiting the smallest room, take the top of the WC cistern and look inside. If there is a lot of calcium deposited, just remember that there may be a similar amount or possibly more, helping to block water pipes.
  • Check that the sink, bath and shower have been properly fitted and sealed around the edges.
  • Check under the sink and bath (if possible) to see if there has been any water leakage.
  • Check that the water runs out of the sink, bath, shower, etc quickly. If it is slow, the pipes may be partially blocked or too narrow.
  • Flush the toilet to make sure the cistern fills properly.
  • Are there small bins the bathroom for toilet paper? If there are, the soil pipes and/or drains may be inadequate and liable to block.
  • Are there heated towel rails, shaver points or any other useful extras?

The lists above are illustrative but not exhaustive.

Professional inspection of resale property

Before making an offer on a resale property engage the professional services of a property surveyor to inspect the property, prepare a report on its condition, and give you an independent appraisal of its market value.

The report should cover the following areas:

  • Foundations.
  • Damp proof course.
  • Signs of damp and if so the seriousness, cause and likely cost of remedial work required.
  • Checks of under floor areas.
  • Signs of cracking in walls and columns.
  • Quality and condition of cement in concrete constructed buildings.
  • Quality and condition of woodwork including checks for dry and wet rot and insect damage.
  • Drains and manholes.
  • Septic tank.
  • Electrical wiring including an earth leakage test.
  • Heating and air conditioning equipment.
  • Swimming pool and related equipment.
  • Roof insulation type and quality.
  • Roof tiling.