Our top 10 most read stories from Cyprus in 2017

CYPRUS Property News attracted more than 960,000 readers this year and as we approach Christmas here are the top ten stories that have attracted the most interest from you, our readers, over the past twelve months.

Here are our top 10 most read stories from Cyprus:

Number 1: Trapped buyers could lose their homes – possible implications of the rulings by the Paphos and Limassol District courts that the ‘Trapped buyers’ law, which enabled those who were duped into buying property in Cyprus that was built on land that developers had previously mortgaged to the bank, was unconstitutional.

(A later ruling by the Limassol District court that the ‘Trapped buyers’ is compliant with the Constitution was appealed. A final ruling is expected to be made by the Supreme Court, but this is likely to take three years.)

Number 2: Swiss Franc mortgages interim judgement – details of the first Cypriot (interim) judgement by the Nicosia District court affecting many bona fide borrowers who bought property in Cyprus with a bank loan denominated in Swiss Francs.

Number 3: Local property tax set to change – news in July that the annual property taxes payable to Municipalities and Communities would be assessed on the revised valuations carried out in 2013 by the Department of Lands & Surveys. It was anticipated that that most people would pay about the same as they did in 2016 when these taxes were assessed on 1980 valuations.

Number 4: Limassol casino contracts imminent – news that contracts Melco-Hard Rock consortium was expected to sign contracts for the construction of the multimillion euro casino project in Zakaki in Limassol. The landmark deal was signed in July and although Hard Rock subsequently withdrew, the project is reported to be proceeding smoothly.

Number 5: Applying for Title Deeds (update 17 May) – this article, which explains how ‘trapped buyers’ and anyone else who has yet to receive their Title Deeds may apply for them, was the most read article in 2016; it remains in the Top 10 for a second year.

Sadly, progress on issuing Title Deeds has not gone as well as anticipated. Land Registry estimates put the number of ‘trapped buyers’ at 70,000 (the majority of whom are Cypriot). Latest reports put the number of applications filed at some 15,000 of which only 7,000 had a Title Deed, around 3,500 of which have been transferred. (Properties whose Title Deeds have yet to be issued are probably still in the process of being inspected and checked by the Town Planning authorities.)

The Cyprus government is looking to amend the ‘trapped buyers’ law to fix the problem.

Number 6: Zyprus: Cyprus property portal – details of an innovative Cyprus property portal for those wishing to buy, sell or rent a property on the island, using technology first used by ‘Zillow’ in the USA and then ‘Zoopla’ in the UK.

New features and facilities have been added since we reported on Zyprus February, including a price forecasting tool giving an indication of the future home price trends. This takes into account population rates, income rates, unemployment rates, property indices, percentage of non-preforming loans together with the physical characteristics of the property and its location.

Number 7: How can Cyprus banks justify their action? – an article explaining the differences between the banks in Cyprus and the banks in Spain where their Supreme Court has ruled that the banks must refund purchasers whose homes were never completed.

Number 8: Cyprus property fraudster convicted (update) – welcome news that fraudster Sascha Morris who duped Cyprus property investors out of more than £5 million by promising them impossible returns was convicted following a prosecution by the CPS Specialist Fraud Division.

Morris was sentenced to 8½ years in prison by the Leeds Crown Court.

Compare this with Cyprus where alleged property fraudsters who also promised impossible returns have yet to be brought to justice.

Number 9: Trapped buyers (update 2) – a report on how the decisions of the Paphos and Limassol District Courts regarding the trapped buyer’s law have created confusion and anger amongst property buyers in Cyprus.

The decisions of the two lower courts have been appealed to the Supreme Court final ruling is expected to be made.

May I take this opportunity to thank you for your support and wish you all a very Merry Christmas and health and happiness in 2018.

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NPLs remain problematic says IMF

non-performing loans (NPLs)THE STRONG growth boosting the Cypriot economy has failed to produce the expected reduction of the high stock non-performing loans (NPLs), hampering the island’s banking system, IMF representative in Cyprus, Vincenzo Guzzo, has said.

“We have clearly a strong economic recovery but that has not produced the reduction of NPLs that someone could have expected and certainly that reflects the weak payment discipline,” Guzzo told the 5th Cyprus banking forum.

Despite three years of GDP growth after the 2013 crisis, Non-performing Loans amount to 46% of total loans in the Cyprus banking system, placing the island second after Greece in the EU.

Guzzo noted that strategic default, borrowers who have the capacity to repay their loans but refrain from doing so, is associated with the lengthy inefficient procedure in enforcing legal claims and also “a perceived blanket protection of primary residence.”

He also referred to the World Bank’s data, according to which contract enforcement takes 1,200 days in Cyprus, while foreclosures take 10 years, which is the longest in the EU.

“Weak enforcement preserves poor preserves, poor payment discipline as the dominant strategy for many borrowers,” he said.

He called for an ambitious strategy to tackle both NPLs and high private debt, stressing that growth alone is not sufficient to reduce NPLs.

On his part, George Syrihas, Executive Board Member of the Central Bank of Cyprus, agreed that the pace of NPLs reduction is slow relative to the Cyprus growth rate, but cautioned that one should not press for fast NPLs reduction.

“The pace we restructure NPLs is critical,” he said.

“We made progress. We had €6 billion reduction but progress is not fast enough given the progress of the economy,” he said.

But he underlined that “the pace with which we restructure loans is critical. We need to do much more because the economy is growing but there is a level on how fast we reduce NPLs.”

Anger over sea caves development

Sea caves at Peyia near Paphos

A PROPOSED development of six luxury residencies in the stunning and environmentally sensitive sea caves area in Peyia in Paphos has infuriated many in the village who fear it heralds a new wave of destructive coastal construction.

“The villas are right on the seafront in an area where erosion is terrible and two of the floors will be underground, so they are excavating right above the sea caves. It’s an atrocity,” local councillor Linda Leblanc told the Sunday Mail.

The luxury homes have all the necessary permits to go ahead, said Leblanc, but questioned how the area was rezoned as suitable for building back in 2000 and why it hadn’t been rezoned as a ‘no build’ zone in the meantime.

The project was given the green light by the Paphos planning department, so in accordance with the law, Peyia is obliged to grant the necessary permits, she said.

“This is an example of how wrong things are in Cyprus and how private interests are served. Legislation is not on our side as a local authority and we are limited as to what we can do in such instances,” she said.

Klitos Papastylianou, of the Initiative for the Protection of the Natural Coastline, said that the six-villa plot is adjacent to the Natura 2000 areas ‘Site of Community Interest’ and ‘Special Protection Area’, the Akamas Peninsula.

He said that it is also an extremely important habitat as it is adjacent to the submerged or partially submerged sea caves. The area is the birthing habitat of the Mediterranean Monk Seal (Monachus monachus), which is listed as the most “critically endangered” marine mammal species in the Mediterranean by the International Union for the Conservation of Nature (IUCN)

As the reproductive period of the species is between late August and early December, with a peak between October and November, this implies that construction work took place during the peak of the reproductive period, he said.

“In addition, due to rainfall during this period, soil from the excavation ended up in the sea, right in front of the sea caves.”

According to the relevant habitat directives, there should be an appropriate assessment of the project’s implications and objectives. However, Papastylianou said that the Preliminary Environmental Impact Assessment (PEIA) submitted does not even use the words ‘sea caves’ or ‘Mediterranean Monk Seal’.

“The environment department issued authorisation without even examining the assessment with the EIA committee. In our view, the project has significant direct impacts on the area, including the degradation of the natural habitat and the disturbance of a priority species,” he said.

According to the developer’s initial brochure, the ‘prime location’ project was for ‘one, two or three’ exclusive luxury villas set on the water’s edge with landscaped gardens and Greek island style architecture. ‘Quality and ambiance are in every corner of this eclectic location,’ it said.

However, Leblanc confirmed that the planning permits were actually granted for six residencies.

“This project will also include parking for eight vehicles, six swimming pools and a sewerage system,” she said.

Leblanc said that although the council’s hands were tied over approval of the project, they insisted that a biological waste station is installed to service the six homes.

The brochure adds that “This unique plot is situated right on the seafront on the beautiful area of Sea Caves. It is only minutes away from the National Nature Park of Akamas and five minutes’ drive to Coral Bay.”

No guide prices are given for the villas, but it’s believed they each come with a two million euro price tag and have been sold to Russian investors.

The developer was also in hot water with Peyia council in October, when it blocked off public access to the sea, due to ongoing works at the site. They have also been asked to move huge mounds of earth, building materials and machinery from the site, which is not permitted, and are on top of the sea caves below, said Leblanc.

Local resident Yeng Chow said that a number of destructive coastal developments have sprung up and ruined a once beautiful and unspoiled area, the six villas being the latest addition. Apart from the destruction of the countryside, Chow also questioned who is purchasing these homes.

“These houses are on a cliff above the sea caves. I wouldn’t want to live there. What about erosion or if there is an earthquake?” he said.

Another local resident, a regular rambler who wished to remain unnamed, said: “This is a real disaster and it’s very upsetting to see new developments and villas popping up everywhere all over this lovely space. The natural beauty is disappearing.”

Papastylianou said that within Peyia’s local plan, a Strategic Environmental Assessment (SEA) along with an appropriate assessment should be undertaken to investigate the existing cumulative impact of development projects in the wider area.

“Until then, no intervention should take place within the Beach Protection Zone (up to 92 metres from the sea) and no construction should take place within and/or adjacent to the nesting habitat of the Mediterranean monk seal protection zone – up to 200 metres from nesting caves.”

In fact, according to the Mediterranean action plan of the United Nations Environment Programme, the protection zone of the nesting habitats of the Mediterranean monk seal should be even larger, reaching 500 metres from birthing caves.

Earlier in the year, the House interior affairs committee said that despite repeated appeals to the government, a study into the integrated management of coastal zones has yet to be concluded. This effectively means that currently coastal areas may be developed, to the detriment of beachgoers.

The ratification of the Barcelona Convention for the Protection of the Marine Environment and the Coastal Region of the Mediterranean was adopted in 1995 and Cyprus is a contracting party.

Once finally ratified, it will set out strict conditions for maritime interventions that must take into account the protection of areas of ecological and landscape interest and the rational use of natural resources.

According to a past report by the auditor-general, there is a total lack of coordinated management when it comes to the island’s beaches, a lack of oversight by local authorities, a lack of environmental policies, and unchecked development.

“Even the famous sea caves are not safe from development and there’s a lot more coming, it will only get worse,” said Leblanc. “All we can do is keep fighting within the limits of the law. Look at what we’ve lost in the last twenty years.”

Crocodile park returns

Nile crocodileA CROCODILE park rejected by the Psematismos and Athienou communities may yet find a home in Cyprus as Israeli company TSA Crocopark has now approached the Achna district to discuss opening the theme park in the area.

It is far from sure that the community council will vote in favour of the plan, and community leader Nicos Vassilas said on Thursday there is some way to go.

“We will need to engage lawyers and do a study,” he said. “Nothing has been decided yet.”

Vassilas declined to disclose the details of the project, but said he has talked about it with the community leaders of Athienou and Psematismos.

“They didn’t give any serious reasons why we should reject it,” he told the Cyprus Mail, adding that a problem in Psematismos was that the park was going to very close to the village.

Opponents of the plan in Cyprus fear there will be a health problem, as there could be an outbreak of the Nile virus, which can be deadly for people. They are also afraid that once the park is established, there are no guarantees that it will not be used for breeding purposes, meaning numbers might spiral within a short period of time. In addition, the crocodiles require vast amounts of water.

After it was reported that a number of reptiles escaped in Israel in 2011, residents are concerned the same might happen in Cyprus, raising fears that the animals could roam around the island, endangering not only human beings but the whole ecosystem.

To find out more, Vassilas visited French crocodile park ‘La Ferme aux Crocodiles’ in Montelimar, France. There were four to five schools visiting at the time, with children aged six to 10, and he said it was good to see their interest.

The French park also attracts a lot of tourists, Vassilas added.

The park reportedly attracts 300,000 visitors annually and is often hailed as one of France’s major tourist attractions. With ten species of crocodiles, giant tortoises weighing between 80 and 150 kilogrammes, lizards, snakes, tropical fish and birds, the farm has over 400 animals living on its premises.

Because it holds over 600 exotic plant species, it is also a relevant horticultural and botanical garden which makes it the largest tropical conservatory that can be visited in France.

The farm also has a laboratory and hatchery for scientific research and animal conservation.

More high-rise towers for Limassol

Limassol high-rise Cybarco trilogy
Limassol Trilogy Project – Photo credit: Cybarco

FIVE more high-rise towers are set to be built in Limassol, already home to several skyscrapers along the city’s coast road.

The developments come in the form of two new projects. The first, by Cybarco, has been christened Trilogy and consists of three towers set to be built on a seafront plot next to Enaerios.

Cybarco said all permits have been obtained and construction is set to begin in the new year. The completion date is expected to be 2023.

The project entails the construction of three towers. The west tower which will be 39 levels, the east with 36 levels and the north with 37 levels.

Meanwhile, the Blue Marine project, by Leptos, has received the nod from the environment department – under conditions – and is now awaiting a planning permit from the Limassol municipality.

Set to be built next to the Limassol Marina, it entails four buildings. Two towers 29 and 33 floors and two buildings, five and nine floors each.

The buildings will house luxury residences as well as indoor and outdoor swimming pools, a health and spa centre and eating facilities.

Before a building permit is issued, the company must first prepare an environmental baseline survey and a disposal plan for underground water that may need to be drawn during construction.

If approved by the environmental department, then a building permit can be granted for construction to move forward.

Environmentalists have voiced concerns over Limassol’s quickly changing coastline that already boasts many high rise buildings including Cybarco’s Oval project, the tallest office building in Limassol at 16 floors or 75 metres.

They argue residents living behind the tall buildings will be cast in shadow and there are concerns over inadequate parking spots – the city’s eternal problem. Both new projects include the creation of more parking spots.

Other high-profile buildings include One Residence on the sea-front, which will rise 170 metres and consist of 37 storeys, making it, according to developer Pafilia, the tallest residential sea-front tower in Europe. However, plans are also underway for the Lanitis Seafront that is to be built on the Lanitis mansion site where one of the towers will boast 37 floors.

Leptos Estates’ meanwhile will build Limassol Del Mar which will not go as high as some of the other residential developments but will stretch across 170 metres of the sea frontage.

Another concern is that after being purchased the luxury residences will remain empty as they will be popular mostly with those wanting to take advantage of Cyprus’ citizenship by investment scheme, introduced in the wake of the 2013 economic crisis.

The scheme states that foreigners who invest €2 million in the property market or Cyprus-based companies, including a residence worth at least €500,000, can obtain citizenship.

New home building permits up 25 per cent

Cyprus building permitsTHE NUMBER of building permits authorised in Cyprus during September 2017 stood at 509 compared with the 467 authorised during the same month last year; an increase of 9.0% according to official figures released by the Cyprus Statistical Service.

The total value of these permits rose by 17.5% to reach €116.8 million compared to September 2016, while their total area rose by 21.3% to reach 105.4 thousand square metres.

During September 2017, building permits were issued for:

  • Residential buildings – 363 permits
  • Non-residential buildings – 93 permits
  • Civil engineering projects – 12 permits
  • Division of plots of land – 31 permits
  • Road construction – 10 permits

During the first nine months of 2017, 4,281 building permits have been issued compared to 3,901 in the first nine months of 2016; an increase of 9.7%. The total value of these permits increased by 48.6% and the total area by 40.8%.

Building permits for new homes

The 363 residential building permits approved in September provided for the construction of 362 new homes (dwellings) comprising 193 single houses and 169 multiple housing units (such as apartments, semis, townhouses and other residential complexes); an increase of 25.3% compared with September 2016 when permits were issued for the construction of 289 new homes.

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

Month 2016
(Dwellings)
2017
(Dwellings)
Increase/
Decrease
%age
Change
January 243 381 138 56.8%
February 312 383 71 22.8%
March 306 412 106 34.6%
April 201 289 88 43.8%
May 278 424 146 52.5%
June 287 381 94 32.8%
July 382 537 155 40.6%
August 229 244 15 6.6%
September 289 362 73 25.3%
Totals 2,527 3,413 886 35.1%

During the first nine months of 2017, the number of new homes for which building permits have been issued rose by 35.1% to 3,413.

Of those 3,413 new homes, 1,247 are being constructed in Limassol, 912 in Nicosia, 555 in Paphos, 491 in Larnaca and 208 in Famagusta.

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