453 new homes in August

Nigel Howarth
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453 new homes in August

Cyprus permits for 453 new homes in AugustTHE TOTAL number of building permits authorised in Cyprus during August 2018 stood at 415 compared with the 410 authorised during August 2017; a rise of 1.2% and providing for the construction of 453 new homes according to official figures released by the Cyprus Statistical Service.

Compared to August 2017, the total value of all building permits rose by 287.2% to reach €349.7 million and their total area rose by 74.5% to reach 148.4 thousand square metres.

During August 2018, building permits were issued for:

  • Residential buildings – 285 permits
  • Community buildings – 1 permit
  • Non-residential buildings – 75 permits
  • Civil engineering projects – 16 permits
  • Division of plots of land – 32 permits
  • Road construction – 6 permits

The 285 residential building permits approved in August provided for the construction of 453 new homes (dwellings). These comprised 226 single houses (compared with 240 in August 2017) and 59 multiple housing units such as apartments, semis, townhouses and other residential complexes (compared with 62 in August 2017).

Building Permits Issued for the Construction of New Homes
(Number of Dwellings)

Month 2017
(Dwellings)		 2018
(Dwellings)		 Increase/
Decrease		 %age
Change
January 381 476 95 24.9%
February 383 431 48 12.5%
March 412 467 55 13.3%
April 289 418 129 49.6%
May
 424 541 117 26.6%
June
 381 506 125 32.8%
July
 537
 632
 95
 17.7%
August
 244
 453
 209
 85.7%
Totals 3,051 3,924 873 28.6%

Of those 453 new residential homes, 167 are scheduled for Limassol 151 for Nicosia, 106 for Larnaca, 19 for Paphos and 10 for Famagusta.

During the first eight months of 2018, 4,114 building permits were issued compared to the 3,772 issued in the same period last year; an increase of 9.1%. The total value of these permits rose by 46.9% and their total area by 30.3%.

According to the Cyprus Statistical Service, building permits constitute a leading indicator of future activity in the construction sector.

Cyprus let off the hook

Press Release
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Cyprus let off the hook

THE EUROPEAN Commission decided today to close infringement proceedings against Cyprus concerning a minimum fee scale for out-of-court legal work, such as the drawing up of wills, contracts, the administration of estates and the registration of companies.

EU law requires Member States to refrain from encouraging undertakings or associations of undertakings to favour or encourage anti-competitive behaviour that would breach Article 101 of the Treaty on the functioning of the European Union.

In April 2018, the Commission raised concerns with the Cypriot authorities that certain legislative provisions, by empowering the Cyprus Bar Association to adopt a minimum fee scale for out-of-court work, encouraged behaviour that could prevent, restrict or distort competition within the EU’s Single Market.

In response to the concerns raised, Cyprus has amended its law. The Commission welcomes the new legislation, which removes the specific provision empowering the Cyprus Bar Association to set these fees.

In parallel, the Commission today also closed an antitrust investigation into the minimum fee scale adopted by the Cyprus Bar Association, based on the empowerment contained in the national legislation.

The Commission welcomes the decision of the Cyprus Bar Association to abrogate this minimum fee scale after the Commission raised concerns that these rules were not compatible with Article 101 of the Treaty on the Functioning of the EU.

The Commission’s intervention means that lawyers can now freely determine their fees when providing out-of-court legal services and that citizens will benefit from more competitive prices in this sector.

Further reading

European Commission Press Release

 

Property sales up 6% in October

Nigel Howarth
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Property sales up 6% in October

Cyprus property sales up 6% in OctoberDURING October 2018, the number of property sales contracts deposited at Land Registry offices across the Republic of Cyprus rose 6% compared to October 2017 according to official figures published by the Department of Lands and Surveys.

Property sales have been rising for 18 consecutive months and this October rise follows rises of 14% in September, 14% in August and 21% in July.

During October a total of 811 contracts for the sale of residential and commercial properties and land (building plots and fields) were deposited at Land Registry offices, compared with the 768 deposited in October 2017.

Of the 768 contracts deposited, 403 (49.7%) were for properties purchased by non-Cypriots.

The figures show a continuing improvement in the economic conditions, coupled with government measures such as the citizenship by investment scheme (aka ‘Passports for Cash’ scheme.)

Although sales in Limassol fell 6% compared with October 2017, they rose in all the other districts. In percentage terms Nicosia led the way with sales rising by 24% followed by Famagusta, where sales rose by 12%. Meanwhile sales in Paphos and Larnaca rose by 11% and 5% respectively.

Total Property Sale Contracts – 2017/2018 Comparison

District Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Nicosia 2017 72
 73
 79
 80 118 162 124 76 87 117 170 306
2018 146 96
 126
 117
 153
 146
 176
 91
 118
 145
Famagusta 2017 21
 19 40
 29
 38 46
 59 47 57 51 52 169
2018 48 52
 40
 52 79
 61
 61
 50
 45 57
Larnaca 2017 102
 100 113
 69
 119 96
 103 88 107 111 151 181
2018 112 99
 116
 83 113
 133
 112
 94
 121 116
Limassol 2017 132
 177 232
 192
 298 304
 289 201 203 306 321 532
2018 225 256
 314
 246 282
 338
 314
 262
 251 289
Paphos 2017 96
 87 162
 136
 183 235
 184 160 148 183 212 349
2018 164 163
 172
 157 201
 180
 233
 156
 152 204
Totals 2017 423
 456 626
 506
 756 843
 739 572 602 768 906 1537
2018 695 666 768 655 828 858 896 653 687 811

Property sales – year to date

Between January and October 2018 sales have increased by 19% with the number of sale contracts deposited rising to 7,517 compared to 6,291 deposited during the same period last year.

So far this year sales in Famagusta have risen 34% and sales in Nicosia have risen 33% Meanwhile sales in Limassol, Paphos, and Larnaca have risen 20%, 13% and 9% respectively.

(The sales figures include an unknown number of properties acquired by banks as part of loan restructurings, etc.)

Overseas property sales

The Land Registry figures reveal that a total of 403 property sale contracts were deposited by non-Cypriots during October 2018. Of those 146 were deposited by EU citizens and the remaining 257 by non-EU citizens, but we cannot quantify the number of non-EU citizens who bought property with a view to applying for citizenship.

Paphos remained the most popular district with the overseas market with the number of property sales contracts deposited reaching 180. Limassol recorded 113, Larnaca 70, Famagusta 21 and Nicosia 19.

Overseas Property Sale Contracts – 2018

District Source Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Nicosia EU 10 8 9 10
 9
 8
 11
 5
 10
 8
Non-EU 10 4 13
 14 9 15
 10 2 11 11
Total 20 12 22 24 18 23 21 7 21 19
Famagusta EU 15 24 8
 12 19 16 20 9 0 7
Non-EU 36 10 14
 28 26 18 23 12 24 14
Total 51 34 22 40 45 34 43 21 24 21
Larnaca EU 9 9 9
 6 9 20
 15 11 15 13
Non-EU 43 46 40
 36 49 52 56 36 46 57
Total 52 55 49 42 58 72 71 47 61 70
Limassol EU 15 17 32
 17 19 22 25
 24 11 27
Non-EU 103 87 83
 67 94 109 95 64 65 86
Total 118 104 115 84 113 131 120 88 76 113
Paphos EU 41 58 55
 49 70 60 79 55 49 91
Non-EU 105 97 74
 87 88 65 92 53 71 89
Total 146 155 129 136 158 125 171 108 120 180
Totals EU 90 116 113
 94 126 126 150 104 85 146
Non-EU 297 244 224
 232 266 259 276 167 217 257
TOTAL 387 360 337 326 392 385 426 271 302 403

During the first ten months of 2018, a total of 3,589 sales contracts were deposited by overseas buyers, with 1,150 deposited by EU nationals and 2,439 by non-EU nationals.

Limassol remains most popular place for non-EU citizens, while Paphos is favoured by the majority of EU citizens.

Cyprus Property Sale Contracts 2000 – 2018

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
2018 (Oct)
 3,589 3,928 47.7% 7,517
Totals
 64,613 151,443 29.9% 216,056

Trapped buyers get Christmas present promise

George Psyllides
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Trapped buyers get Christmas present promise

Trapped buyers in Cyprus get Christmas present promisePARTIES on Wednesday said they intend to resolve the Title Deeds mess by Christmas, as ruling Disy chief Averof Neophytou warned banks not to go back on a pledge they had given in July or he will come down on them hard.

Back in July, banks pledged not to raise objections to a disputed law in return for the approval of bills making it easier for banks to foreclose on property owners in arrears on their mortgages.

The 2015 law aimed at helping around 70,000 trapped buyers who had paid for their properties in full but had not been issued with their Title Deeds because the developers had mortgages on the properties.

Since developers’ land and buildings are counted as assets that need to be offset against their debt to banks, this gave banks a claim on properties that had been mortgaged by developers.

The ‘trapped buyers’ law, however, appears to be unconstitutional, although it has not yet been judged by the Supreme Court.

Opposition parties said Wednesday they had prepared a law proposal that essentially included the same provisions as the 2015 law but overcame unconstitutional issues.

During discussion of the matter before the House legal affairs committee, Neophytou reiterated he would come down hard on the banks if they went back on their pledge.

“This was the clear understanding we had,” he said, stressing, however, that they were not prepared to support cases where it was clear there had been collusion between the buyer and the seller.

Akel MP Aristos Damianou said the bill they prepared covered the issues raised in the courts.

“The philosophy of our proposals is adopted by the land registry and it considers them to be in the right direction,” Damianou said.

He suggested however, that certain quarters would try to delay the effort so they proposed the creation of a subcommittee that will seek to resolve any issues with the state Legal Service so as to have a final proposal by November 28.

Diko MP Christiana Erotokritou said three years on, the government was ignoring the thousands of trapped buyers, continuously bringing up the excuse that a bill is being processed.

“Our intention is to have the problem resolved by Christmas,” she said.

The 2015 law grants the land registry director the authority to exempt, eliminate, transfer and cancel mortgages and or other encumbrances, depending on the case and under certain conditions, as the state sought to sort out the Title Deed mess.

However, banks contested the 2015 law and won rulings that it was unconstitutional.

Courts said it violated Article 26 of the constitution, which affords individuals the right to enter freely into any contract.

Banks had said at the time they would view each case separately.

For instance, there were cases where subcontractors who did work for developers were given flats instead of money, which they probably rented afterwards. They then took advantage of the law to secure a Title Deed.

They also say that in some cases the buyer together with the developer, pre-dated contracts in a bid to get a title, cheating the bank in the process.

These cases do not fall under the pledge and will certainly be contested.

A banking source suggested the parties were putting on a show because they knew it would be very difficult if not impossible to resolve the constitutional issues.

The source also said the banks had kept their pledge but reiterated that each case would be viewed separately.

In the cases where it was clear that the buyer had been shafted the banks withdrew their lawsuits. In the past two months, some 40 trapped buyers had been freed, the source said.

Probe into sharp rent rises

Staff Reporter
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Probe into sharp rent rises

Cyprus: Probe into sharp rent risesAMID growing frustration over the sharp rise in rents, particularly in Limassol, the House Interior Committee is set to look for possible solutions at the initiative of the Green Party.

In a statement announcing that the committee will be probing the issue, the Greens cited recent reports of families who have found themselves homeless because rents are too expensive. This was an issue of concern and action must be taken to find solutions, they added.

They said that House Interior Committee chairwoman Eleni Mavrou had agreed to table the issue for discussion.

The Greens added that the problem was particularly acute for students, with many having to interrupt their studies.

Speaking on Radio Active yesterday, Lefteris Georgiou of the Movement Against Excessive Rents cited the case of two families who have found themselves on the streets because they could not afford to pay their rent.

He said that in the first instance the landlord had evicted the family so that he could rent the house at triple the rent. The second case involved a low-income family that had fallen behind on their payments. And he said that one person he knew of has been sleeping on the streets for the past two years.

According to Georgiou, one solution – which has been rejected by Limassol Municipality – was to temporarily accommodate these families in 24 houses on Mishiaouli and Kavasoglu street. These houses have been found to be unsuitable by Limassol Municipality even though families are living in exactly the same houses in Ayios Nicolaos area, he said.

© In-Cyprus.com

Larnaca marina investors given more time

Editorial
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Larnaca marina investors given more time

WHILE local authorities, businesses and other stakeholders are looking forward to seeing the project take off as Larnaca will benefit significantly from the €400 million development, fears are expressed that the project might go south along with other privatization projects planned.

The strategic investor, an Israeli consortium composed of Ampa Ltd and Israel Shipyards Ltd has asked for a third extension for submitting its financial proposal to the government. This time to finalise some outstanding details regarding bank guarantees.

The consortium was to deliver their proposal, initially on 21 September it was then deferred to 5 October before asking for a three-week extension. The extension given to the investors in September followed a delay from the government’s side to submit the final tender documents.

Meanwhile, concerns over the new extension have raised the alarm among stakeholders as the Israeli consortium’s proposal is the only one still on the table. Four out of the five companies that had initially shown interest withdrew from the process leaving the Israelis as the only interested party and the state’s sole interlocutor for the project.

Larnaca Mayor Andreas Vyras talking to the Financial Mirror expressed his disappointment over the new delay, hoping it will be the last chapter of the long road leading to the launch of the project.

However, Vyras stressed that he is not troubled over the new extension given to the consortium as he finds that the reason behind the delay is valid and a common issue faced in such dealings.

He said that he sees no reason why the deal should fall through, especially after the government had withdrawn a contentious clause from the tender which foresaw that the project promoter had to compensate Limassol port for any loss of traffic it may suffer due to the Larnaca port upgrade.

Specifically, a ceiling of 900 tonnes of cargo for the Larnaca port was included in the initial tender document, which if exceeded the company managing the port would have to pay a penalty to Limassol. The Israelis had vigorously protested the clause which endangered the whole deal.

Vyras confirmed the clause was removed and in what is understood to be a compromise, the yearly rent of the land has risen from EUR 400,000 to EUR 700,000.

“The consortium has not given any indication that they object to a rise of the rent, so I see no obstacle for the deal to go ahead,” he said.

The consortium will develop the port and the marina and operate them on a long-term lease — similar to the Larnaca airport deal which is essentially a build-operate-transfer (BOT) agreement. The project concerns the licensing through a Concession Agreement of the Port and Marina of Larnaca for 40 years and the lease of the land for the development of real estate for a period of 125 years.

The venture is expected to upgrade Larnaca to the standard other towns have reached over recent years.

Plans also foresee the construction of luxury homes along the Larnaca marina which will more than double in size.

Privatisation plans

The upgrade of the Larnaca Port and Marina is part of the government’s privatization plans.

According to the draft budgetary plan for 2019, as submitted to the European Commission, the government plans to go ahead with privatising five state institutions and assets.

The first item on the list is the Larnaca Marina and Port, the second largest on the island, which according to the draft is expected to be signed within the current year. The latest developments, however, have raised a question mark on whether the privatisation process will indeed be completed by the end of 2018.

Market analysts fear that the Larnaca Port and Marina project may have already fallen victim to what they see as “a lack of political strategy regarding privatisations on behalf of the state and the political leadership in general”.

Analysts claim that, although on paper the government is adamant about going ahead with its privatisation plans, its actions show otherwise. “Privatisations are going ahead at a snail’s pace. It is indicative that the stock exchange does not appear on the list in the draft budgetary plan,” one analyst.

Analysts believe that the reason behind this, is quite simply that there will be no interest from investors as “the Cyprus Stock Exchange is not worth much at the moment. It will only draw investors’ attention if it is made attractive with the participation of public companies which will have either undergone or will be undergoing a privatisation process”.

They said that as things stand today, CyTA telecoms and the electricity authority (EAC) are not to be privatised any time soon. “We do not see that the government has the will to confront the parliament on the issue of CyTA’s privatisation. Instead, it will go ahead with creating the conditions for the attraction of a strategic investor through equity participation,” an expert said.

Regarding the privatisation process of the EAC, analysts said that the state is to suffice itself with the Functional Unbundling of the authority as was endorsed in 2016.

The final review of the EAC Functional Unbundling is expected to take place at the end of December 2018.

The Cabinet decided on 7 December 2017 to proceed with the full independence of the Cyprus Transmission System Operator (TSOC) from the EAC. The TSOC will be responsible for the system operation and the electricity market operation. The independence of the TSOC from the EAC is expected to be completed by 1 July 2019.

Meanwhile, a Ministry of Finance senior official confirmed to the Financial Mirror that priority will be given to privatising the state lottery and some state assets in the Troodos Mountains.

He said that upon the relevant recommendations of the appointed advisors, Cabinet decided the licensing of the activities of the National Lottery for a period of 15 years, to include the current lottery products and the addition of e-instants. “A revised bill has been submitted for approval to the House and will then be filed with the European Commission to be assessed whether it is compatible with the EU acquis,” the official said.

He said the state owns nearly 200 assets in Troodos which have been declared as assets subject to privatisation, noting that the extent and structure have yet to be determined.

The privatisation list also includes the development of the Ayia Napa and Paphos Marinas. A design-build-operate-transfer agreement for the Ayia Napa Resort Marina was signed in 2016, with construction expected to be completed next year. A similar agreement for the Paphos Resort Marina is expected to be signed within 2019.

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