Silver medal for residence permits

Nigel Howarth
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Silver medal for residence permits

Cyprus finished in the silver medal position for issuing the second highest number of first residence permits to non-EU citizens in the 27 EU member states during 2019.

According to Eurostat, Cyprus, which issued 26.4 permits per 1,000 of its population, was robbed of the gold medal by Malta, which issued 42 permits. The bronze medal went to Poland; trailing in third place issuing 19.1 permits relative to its population.

Eurostat estimates that an average of 6.6 first residence permits were issued per 1,000 of the population across all EU members states in 2019; Cyprus issued four times that number.

The five largest groups issued with first residency permits by Cyprus were:

  • Indian citizens 4,665;
  • Russian citizens 3,114;
  • Nepalese citizens 2,812;
  • Syrian citizens 2,040;
  • Philippine citizens 1,958.

(A first residency permit enables a non-EU citizen to stay for at least three months in the EU member state’s territory.)

Citizenship investigations

Meanwhile, an audit service report said last Friday that a substantial number of citizenships granted through the island’s investment programme did not meet the criteria, suggesting an abuse of power by government officials. The number of citizenships involved was not disclosed.

While we’re on the subject of the now defunct Citizenship for Investment (aka Golden Passport) scheme, I came across a video on the subject, which should bring a smile to your face.

Stevie Georgiou’s a Cypriot comedian. He’s hilarious and you can watch his videos on Georgiou’s World. You can also find Stevie on Instagram.

Here’s a video he made a few weeks ago about the Golden Passport scheme. Enjoy.

 

Cyprus house prices rise despite pandemic

Editorial
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Cyprus house prices rise despite pandemic

House prices continued their upward trend in the second quarter of 2020, recording a quarterly increase of 0.9% from an 0.4% rise in the first three months, despite the growing market uncertainty induced by the pandemic.

This is tracked in the Central Bank of Cyprus (CBC) Residential Property Price Index (RPPI).

House prices increased by 1% while remaining stable in the previous quarter and apartment prices increased by 0.8% slower than the 1.4% rise in the previous quarter.

On an annual basis, both house and apartment prices increased during Q2 by 1.5% and 4.3% respectively, compared to 0.8% and 4.6% respectively in the previous quarter.

A slowdown in the growth of the Apartment Price Index is attributed to lower demand from foreign investors due to the stricter criteria in the Cyprus Investment Programme which was later scrapped.

Another major factor is the Covid-19 pandemic that enhances uncertainty in the property market.

Apartment prices on a quarterly basis recorded an increase in Limassol, Nicosia and Larnaca by 2.1%, 0.9% and 0.4% respectively while Paphos and Famagusta saw reductions of 1.7% and 0.6% respectively.

On an annual basis, there was an increase in all districts with the exception of Famagusta which had a 0.1% decrease.

Limassol had the biggest annual increase of 8.2%, followed by Larnaca 3.4%, Nicosia 2.6% and Paphos 2.4%.

The annual increases in house prices are mainly recorded in Nicosia district.

CBC attributed this fact to Cypriots have returned to the real estate market as a good investment and are gradually buying a house again for this purpose.

It is also pointed out that real estate as an investment currently offers higher returns compared to other forms of investments or bank deposits.

During Q2 2020, RPPI increased on a quarterly basis in almost all districts except for Famagusta, where it remained stable.

A quarterly increase in house prices was recorded in Limassol of 1.3%, in Nicosia, they improved 1.1%, in Paphos by 0.7% and in Larnaca by 0.1%.

On a yearly basis, there was an increase in all districts in house prices, Larnaca saw the biggest upswing at 2.6%, then Limassol with 2.4%, in Nicosia it was up 2%, in Famagusta 1.7% and in Paphos price growth of 1.5%.

Limassol the most popular spot for overseas buyers

Nigel Howarth
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Limassol the most popular spot for overseas buyers

Limassol, arguably the most cosmopolitan and vibrant coastal city in Cyprus and its environs, has become the most popular destination for overseas buyers seeking a place in the sun according to the latest monthly figures published by the island’s Lands and Surveys department.

For many years Paphos, on the western coast of the island, has been the most favoured destination for overseas buyers, but official sales figures for October reveal it’s lost out to Limassol for the first time in many years. Whether Paphos will regain its popularity remains to be seen.

Property sales to the overseas buyers (non-Cypriot) rose by 12% in October compared to the same month last year. Although sales in Larnaca and Paphos fell by 34% and 6% respectively, these falls were more than outweighed increased sales in Nicosia (up 85%), Limassol (up 63%) and Famagusta (up 29%).

Sales to overseas buyers in October accounted for 34% of total sales during the month.

Total Overseas Property Sale Contracts – 2019/2020 Comparison

District Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Nicosia 2019 34 30 16 32 45 24 21 13 23 20 21 26
2020 19 23 15 9 17 11 21 14 21 37
Famagusta 2019 21 29 29 38 42 18 47 17 24 17 35 38
2020 40 29 25 4 20 13 31 30 29 22
Larnaca 2019 60 43 71 67 90 60 67 40 35 79 53 74
2020 71 54 50 11 31 38 59 36 42 52
Limassol 2019 85 104 95 137 217 81 109 62 64 84 86 72
2020 82 89 67 49 39 52 87 51 80 137
Paphos 2019 157 180 157 155 229 136 176 112 139 126 169 151
2020 113 142 55 51 89 83 87 68 88 118
Totals 2019 357 386 368 429 623 319 420 244 285 326 364 361
2020 325 337 212 124 196 197 269 199 260 366

During the first ten months of 2020 sales to the overseas market have declined 34% compared to the same period last year.

Sales to EU nationals

Sales to the EU segment of the overseas property market in October accounted for 11% of total sales – and the number of sales fell 13% compared to October 2019.

Although sales in Famagusta, Nicosia and Limassol rose by 120%, 60% and 10% respectively, they fell by 39% in Larnaca and by 35% in Paphos.

Foreign (EU) Property Sale Contracts – 2019/2020 Comparison

District Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Nicosia 2019 14 14 9 19 20 16 13 5 8 10 15 14
2020 9 12 9 3 10 7 16 11 14 16
Famagusta 2019 9 6 14 17 10 8 17 14 10 5 9 23
2020 6 14 10 3 4 9 28 9 6 11
Larnaca 2019 12 12 21 18 20 11 16 13 6 23 14 23
2020 21 13 11 0 3 6 19 17 14 14
Limassol 2019 16 25 20 21 28 26 27 17 25 30 26 25
2020 28 30 11 12 14 15 28 12 39 33
Paphos 2019 56 72 61 48 69 59 73 58 61 95 61 72
2020 40 60 25 24 21 18 44 32 49 42
Totals 2019 107 129 125 123 147 120 146 107 110 133 125 157
2020 104 129 66 42 52 55 135 81 122 116

During the first ten months of 2020 sales to the EU segment of the overseas property market have fallen 28% compared to the same period last year.

Sales to non-EU nationals

Sales to the non-EU segment of the property market in October accounted for 23% of total sales, with the number of sale contracts deposited at Land Registry offices up 30% compared to October 2019.

While sales in Larnaca and Famagusta fell be 32% and 8% respectively, they rose in the remailing three districts.

Sales in Nicosia rose 110%, sales in Limassol rose 93%, while sales in Paphos rose by 25%.

We suspect that the rise in the number of sales, particularly in Limassol and Paphos, may be due to non-EU citizens rushing to meet the citizenship deadline of 1st November.

Foreign (Non-EU) Property Sale Contracts – 2019/2020 Comparison

District Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Nicosia 2019 20 17 7 13 25 8 8 8 15 10 6 12
2020 10 11 6 6 7 4 5 3 7 21
Famagusta 2019 12 23 15 21 32 10 30 3 14 12 26 15
2020 34 15 15 1 16 4 3 21 23 11
Larnaca 2019 48 31 50 49 70 49 51 27 29 56 39 51
2020 50 41 39 11 28 32 40 19 28 38
Limassol 2019 69 79 75 116 189 55 82 45 39 54 60 47
2020 54 59 56 37 25 37 43 39 41 104
Paphos 2019 101 108 96 107 160 77 103 54 78 61 108 79
2020 73 82 30 27 68 65 43 36 39 76
Totals 2019 250 257 243 306 476 199 274 137 175 193 239 204
2020 221 208 146 82 144 142 134 118 138 250

During the first nine months of 2020 sales to the non-EU segment of the overseas market have fallen 42% compared to the same period last year.

Property sales to the domestic (Cypriot) market

Domestic sales performed strongly in October, increasing by 43% compared to the same month last year, with sales rising in all districts of the island.

Sales in Limassol rose by 84% and sales in Famagusta rose 76%. Meanwhile sales in Paphos, Larnaca and Nicosia rose by 27%, 25% and 17% respectively.

Domestic Property Sale Contracts – 2019/2020 Comparison

District Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Nicosia 2019 127 164 115 137 168 121 153 90 114 163 187 154
2020 178 155 124 29 83 167 230 143 174 190
Famagusta 2019 32 19 16 58 45 25 2 13 16 33 13 26
2020 10 18 16 6 8 43 29 9 30 58
Larnaca 2019 54 82 47 73 83 42 90 53 67 81 69 88
2020 76 64 56 13 28 71 72 51 75 101
Limassol 2019 166 152 192 291 329 138 177 134 176 144 210 212
2020 98 136 76 23 73 150 183 142 173 265
Paphos 2019 30 31 28 69 175 69 54 54 34 66 64 69
2020 55 29 26 21 31 18 42 17 74 84
Totals 2019 409 448 398 628 800 395 476 344 407 487 543 549
2020 417 402 298 92 223 449 556 362 526 698

During the first ten months of 2020 the number of sales to the domestic market has fallen by 16% compared to the same period last year.

Analysis of property sales since 2000

Cyprus Property Sale Contracts 2000 – 2020

Year Overseas Sales Domestic Sales Percentage
Overseas Sales		 Total
Sales
2000 450 12,214 3.6% 12,664
2001 1,207 12,849 8.6% 14,056
2002 2,548 14,111 15.3% 16,659
2003 3,981 15,294 20.7% 19,275
2004 5,384 11,947 31.1% 17,331
2005 6,485 10,106 39.1% 16,591
2006 8,355 8,598 49.3% 16,953
2007 11,281 9,964 53.1% 21,245
2008 6,636 8,031 45.2% 14,667
2009 1,761 6,409 21.6% 8,170
2010 2,030 6,568 23.6% 8,598
2011 1,652 5,366 23.5% 7,018
2012 1,476 4,793 23.5% 6,269
2013 1,017 2,750 27.0% 3,767
2014 1,193 3,334 26.4% 4,527
2015 1,349 3,603 27.2% 4,952
2016
 1,813 5,250 25.7% 7,063
2017
 2,406 6,328 27.5% 8,734
20181 4,367 4,875 47.3% 9,242
2019
 4,482 5,884 43.2% 10,366
2020 (Oct)
 2,485 4,023 38.2% 6,508
Totals
 72,358 162,297 30.8% 234,655

1 The Department of Lands & Surveys has advised that overseas sales in 2018 and subsequent year should not be compared to sales in previous years due to changes in the methodology used to classify ‘Aliens’ (foreigners).

Lazy Brits told to get their papers

Bejay Browne
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Lazy Brits told to get their papers

Lazy British expats or those with a fear of government offices have been chided by the British High Commission for not getting their residency status sorted before the Brexit transition period ends on December 31, now less than six weeks away.

The good news is that British citizens who can prove they have the right to be here have nothing to fear come January 1, 2021: the Cyprus government has promised to be flexible. But this is no excuse, the High Commission says. The message is: you have to get your status sorted out anyway, so do it now.

“The Cyprus authorities will be understanding and continue to allow those who can prove residency to apply when they are able to without a hard deadline. This, however, doesn’t mean that people should relax and feel free to take their time,” a British High Commission consular policy officer told the Sunday Mail this week.

That status comes down to one of two pieces of paper, the MEU1 and the MEU3. The first is a registration document for those in Cyprus more than 90 days and less than five years; the second provides permanent residence for those who have lived here for more than five years. One or the other is crucial for access to vital services like GESY. There is also an MEU2 for non-EU family members of an EU citizen.

Vivienne Parker, 58, is a British expat who, like too many others, still has not applied for the correct papers.

“I’m ashamed to admit that I have only just started the procedure to obtain my MEU3, although I’ve lived in Cyprus for over 30 years, and paid social insurance and taxes for most of that time. My children were born here and went to school here,” she told the Sunday Mail, adding that she stupidly had got her and family only lower-level MEU1s ten years ago when they were already eligible for MEU3s. This system has been in place since after Cyprus joined the EU in 2004.

“I know I have to get it sorted and get my status in order, but after all these years here, I dread all the paperwork and queues. I have started it, but already hit a brick wall.”

Part of that brick wall is contradictory advice from the immigration department depending on where a resident lives. Parker was told she should show up at the immigration office armed with just a valid passport to discuss the necessary paperwork she needed and arrange an interview, which may not be until next year but at least put her in the system ahead of December 31.

“I went to the Nicosia office, queued up for ages. When I finally got to the right booth, they looked at me like I had come from another planet. ‘There’s no interview,’ I was told. ‘Just show up when you have all the papers’.”

This is in sharp contrast to the Paphos immigration office, an official of which told the Sunday Mail that the current procedure to obtain a residency document requires that the applicant attends an immigration office with their passport to make an appointment.

They are then given a list of the required documents and a specific, individual number.

“We are making appointments for next year, these people will be covered by the current laws,” the official told the Sunday Mail.

A Paphos resident confirmed that was the case.

“I visited immigration in Paphos last week and have an appointment for next February to get my MEU3,” he told the newspaper.

The MEU3 paperwork includes rental contracts or title deeds, five years of utility bills and bank statements to name just a tiny selection.

The extent of those too lazy or unable to get their papers sorted out is highlighted by the Cyprus Residency Planning Group (CRPG), which operates a help desk for all UK nationals living in Cyprus.

Their statistics show that the average length of time British expats have lived in Cyprus is 13.9 years, and some still have no form of residency documentation whatsoever.

“If they do, it is the old style, pre-EU accession, pink slip, brown book or a stamp in their passports. It is understandable that some UK nationals do not realise that they still need to apply for residency, but they do,” a CRPG spokesperson informed the Sunday Mail.

She was referring to examples of outdated and invalid residency documents which include: a brown residency booklet, a blue slip, a pink slip, an ARC and a residency stamp in a UK passport that were actually only valid until Cyprus joined the EU in 2004, but many never updated.

The aim of the CRPG is to provide practical assistance to UK nationals who may have difficulty completing their residency application. This includes pensioners, disabled people and those living in remote areas.

After January 1, 2021, a new system will be in place.

The MEU1s, MEU2s and MEU3s can be replaced by new residence documents to be issued to UK nationals and family members. They will be much like the current system. A UK1, like the MEU1, will be valid for five years, a UK2, like the MEU2, for non-UK national family members, valid for five years and a permanent residence document the UK3, like the MEU3, for UK nationals and family members, will be valid for ten years.

The process will be particularly straightforward for British nationals and their family members who are already holders of an MEU1, MEU2 or MEU3.

To obtain these, holders of the current residence document – MEU1, MEU2, MEU3 – will only need to submit a valid passport as proof of identity and their current permit.

But this easy version of the new documents will be issued based on the paperwork of the old system. For example, an MEU3 holder will get a UK3 easily, but only if they previously submitted the paperwork for the MEU3. If not, the paperwork remains the same.

There is no need for a time extension since any UK national who can prove they were resident in Cyprus or who arrives by December 31, will be able to apply with no deadline, though with the amount of paperwork current until now.

“For example, if a UK national has resided in Cyprus since 2008, but hasn’t applied for their MEU3, they can do so even after the end of the year with the right documents to prove their residency since 2008,” the British High Commission consular policy officer said.

“In the case of someone living in Cyprus since 2017, who still hasn’t applied for an MEU1, and may currently be in the UK and may not make it back to Cyprus before the end of the year, or if their appointment with immigration is for next year, there’s no problem either,” she added.

“They can apply for residency when they come back to Cyprus or next year, provided they have all the documentary proof to show that they were resident since 2017.”

She stressed though, that UK nationals already resident or arriving in Cyprus by December 2020 should settle their residency status as soon as possible, as after the end of the year, the rules for travelling to Cyprus will change.

“UK nationals should check that their passport is valid before making any travel arrangements.”

In addition, British nationals intending to live in Cyprus after December 31, 2020, should exchange their UK driving licence for a Cypriot one.

For more information

Cyprus Residency Planning Group (CRPG)
Mobile 99 826 087 (Mon- Fri 9:00am to 1:00pm)
Email the help desk at [email protected]
Visit their website at www.cyprus-crpg.org

Residence rights and documents

Residence Rights and Residence Documents in The Republic of Cyprus

BREXIT

Residence Rights and Residence Documents in The Republic of Cyprus – Under the Withdrawal Agreement

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The bottom has fallen out of luxury real estate

Panos Danos
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The bottom has fallen out of luxury real estate

Luxury real estate may see a dramatic downturn next year, as the Cyprus Investment Program is no longer available to foreign investors, plus the pandemic has made market conditions even worse.

A bad taste left by Al Jazeera videos pushed the retreat by foreign buyers further and may send prices spiralling to 2013 era levels.

Foreign buyers – who have helped fuel the push in premium homes and high-rise building apartments (mainly in Limassol and Paphos) – are on the wane.

According to DANOS International Property Consultants and Valuers, the volume of foreign purchases will see a sharp drop in 2021.

The reasons include limits on taking cash out of foreign countries, anti-corruption laws taking effect, market saturation, rising property prices, the lack of citizenship incentive and concern about the stability of the EU economy, market and political situation.

The Limassol real estate market should slow significantly as sale volumes across the town are expected to fall by at least 25%.

The average price for a high-rise tower apartment is expected to fall in the last quarter of this year and continue falling in 2021, as well.

If you look around Limassol at all these, 15-28 storey modern towers with starting prices at €6,000 per square metre for a luxury apartment, people living in Limassol, are not buying them.

Real estate sales in Paphos and Larnaca will also feel an impact.

Prices will also slow down for these locations due to multiple reasons, and again, mainly, because the interest from abroad has dried up significantly.

The driver of the Cyprus real estate business has mainly been Russia and China, with 35% of real estate business done in Limassol, historically coming from foreign investment.

If you look at the real estate market, we had a tremendous number of buyers who came in because of the Cyprus Investment Program and prices were down.

Now prices are much higher, both absolutely and due to previous demand.

Then there is European and USA political instability.

Also, because of the pandemic – economic uncertainty, we are seeing people in Cyprus, selling their property to save money or simply to pay back their bank debts.

It is serious – people can’t rely on their business for enough income.

That has probably been the greatest impact.

Then you have the Turkish occupation and provocations making a big impact on uncertainty.

In the current financial and political climate, Cyprus is viewed as not being as stable as it once was.

One source of funding for a percentage of buyers was “questionable money”.

With the gradual enforcement of legislation, however, forced identification of buyers in areas with many all-cash transactions that raised questions about money laundering led to a significant deterioration of “dodgy” buyers.

In real estate, there was the ability to protect the identity of the owner, but only when done for legitimate reasons.

For example, a celebrity might not want to attract crowds of gawkers. But now, even in those cases, the government insists on knowing the ultimate buyer.

For now, when it comes to upscale real estate, many properties that once would have attracted buyers shall sit empty until market conditions settle, a COVID-19 vaccine is available, and the Turkish provocations resolved peacefully.

About the author

Panos Danos is the CEO of DANOS An Alliance of BNP Paribas Real Estate, member of the Cyprus Valuers board of directors.

Golden passports scheme ‘irrevocably terminated’

Elias Hazou
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Golden passports scheme ‘irrevocably terminated’

The controversial Citizenship-by-Investment (CBI) scheme is “definitively and irrevocably terminated”, Interior Minister Nicos Nouris assured MPs on Monday, but lawmakers insisted that does not let the government off the hook.

Presenting to parliament his ministry’s budget for 2021 (€571 million total), Nouris inevitably addressed the passports affair, which blew up after al Jazeera aired a documentary in October. The film – showing active politicians engaging in apparent wheeling and dealing – forced the government’s hand, and it axed the CBI shortly later.

Meantime the European Commission has initiated infringement proceedings against Cyprus over the matter. Effectively the commission alleges that Cyprus was ‘selling’ passports to investors who did not have real bonds to the country.

The commission stated that Cyprus’ practices potentially undermined and endangered “the integrity of the EU citizenship and its smooth operation”.

On Monday Nouris reiterated that, although the CBI has been scrapped, the legislation and regulations governing it are still in place for practical reasons.

For instance, the cabinet is currently reviewing a panel’s recommendations regarding which citizenships – deemed dodgy in retrospect – can be revoked.

In addition, hundreds of citizenship applications – filed this year before the CBI was officially nixed – are pending review. These concern 691 foreign investors and 722 family members.

On the European Commission’s infringement process, Nouris said Cyprus will respond to the commission’s queries within the deadline, and that a response is being drafted by the attorney-general’s office.

It’s understood Cyprus needs to deliver its response by December 6.

Infringement proceedings against a member-state – based on suspected breaches of EU law – entail several phases. First the commission sends a letter of formal notice requesting further information to the country concerned, which must send a detailed reply within a specified period, usually two months. This is the query stage that pertains to the current passports issue.

If the commission concludes that the country is failing to fulfil its obligations under EU law, it may send a reasoned opinion – a formal request to comply with EU law.

If the country still doesn’t comply, the commission may decide to refer the matter to the Court of Justice. Most cases are settled before being referred to the court.

Christiana Erotokritou, an MP with junior opposition Diko, said the government needs to do a lot more if the Republic is to “regain its lost credibility” in relation to the passports issue.

At the minimum, she said, the government must grant the auditor-general access to all citizenship files. It would not only boost transparency, but also provide the added bonus of demonstrating to the European Commission that an independent authority in Cyprus is engaging in oversight.

The interior ministry and the auditor-general have been at loggerheads over the latter’s request for access to files.

Moving onto another matter – the government’s immigration policy – Nouris said that despite the sharp decline in asylum applications this year (50 per cent fewer than in 2019) due to the coronavirus pandemic the system is still struggling to cope due to the mass influx in prior years.

He said a prime objective of the current policy is to significantly shorten the time it takes to process asylum applications, so that especially applicants hailing from so-called ‘safe countries’ are processed within two months at the most, thus helping clear the backlog.

According to the minister, following an agreement between Cyprus and Frontex – the European Border and Coast Guard Agency – some 1,200 illegal migrants have been returned to their countries over the past five months.

In addition, Cyprus has signed bilateral readmission agreements with a number of countries, including Lebanon, Georgia and India.

In the ministry’s budget for 2021, the line item for expenditures relating to immigration policy comes to €48 million, some €18 million more than the funds allocated in 2020.

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