Estate agents upbeat about property prospects

Nigel Howarth
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Estate agents upbeat about property prospects

Estate agents upbeat about Cyprus property prospectsSTOCKWATCH carried out a survey recently in which it asked ten estate agents and valuers for their opinion on the prospects for the residential property sector. Although they agreed that 2016 will be the best year since 2008, opinions varied on the speed of a recovery in prices.

Half of those who took part in the survey expect property prices to stabilise at last year’s levels in 2016, while others anticipate that prices will recover following the downward trend since the property bubble burst.

The property sector appears to be recovering after many years of recession. The latest official figures from the Department of Lands and Surveys reveal that the number of property sales in Cyprus increased by 28% during the first two months of 2016 compared with the same period last year – and both the Central Bank’s Residential Property Price Index and the RICS (Cyprus) Property Price Index report a slowdown in price falls.

The estate agents and valuers believe that residential property prices have bottomed out and they do not expect to see further price falls in 2016.

Property valuer Polys Kourousides considers that that prices will stabilise in good urban areas, but added that property prices in rural and surrounding areas may see a small reduction.

Fox Smart Estate Agency chief, George Mouskides, who is also president of Cyprus Land & Property Owners Association (KSIA), believes that the situation is fluid as both positive and negative elements are affecting the market. He considers that it is more likely that while there is pressure to stabilise prices property sales will gradually improve but there is a possibility of marginal increases in prices

Andreas Andreou from APS Property considers that the value of apartments and houses will rise in 2016 and expects apartments to fare better than houses.

Speaking to StockWatch he said “I expect that Nicosia and Larnaca will see a relatively higher increase, followed by Paphos and Limassol. Famagusta will most likely be last as it is more affected by seasonality.”

Solomon Kourouklides of Buy-Rent-Property in Limassol, who is also the first vice president of the Cyprus Real Estate Agents Association, told StockWatch that the fact that Cyprus is no longer in an adjustment program, is encouraging for foreign and local investors.

Marinos Kynegirou of Marinos Kynegirou Estate Agencies and president of the Professional Real Estate Agents Association believes that stabilisation will continue through 2016. However, he did not rule out the possibility of price increases in more advantageous and commercial properties.

Andreas Andreou of Sabbianco Properties in Nicosia expects property prices to increase by up to 15%.

Speaking to StockWatch he said “In the first three months of the year, there is stabilisation with an upward trend. In houses, the increase is expected to reach 15% in 2016 while apartments show a different pattern as there are no good options for sale.”

Charalampos Petrides of Landtourist Estates, believes that prices of good properties in seaside areas will improve, while those in city centres will stabilise.

Koullis Talatinis of Rois Nicolaides Talatinis and president of Cyprus Realtors, also considers that prices of good properties and properties in seaside areas will increase, while those in areas surrounding cities will fall.

Paphos valuer Thomas Demopoulos of Axia Chartered Surveyors noted that the main consideration is the attitude of banks regarding bad loans.

Speaking to StockWatch he said “If there is a positive attitude from the side of the banks, the property market is going to recover” adding that those wishing to buy property before the end of 2016 will benefit from a reduction in Property Transfer Fees and Capital Gains Tax when they sell.

Photis Photiou of Photiou Estates in Famagusta, noted that the property market is improving and he expects that much of the growth will occur in Paphos and Famagusta.

Property sales surge (Update)

Nigel Howarth
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12
Property sales surge (Update)

Cyprus property sales surgePROPERTY sales in Cyprus surged by 54% in February compared to the same month last year according to official figures issued by the Department of Lands & Surveys.

This 54% rise in February follows a 2% rise in January and a 13% rise in December 2015.

February saw a total of 501 contracts for the sale of commercial and residential properties and land (building plots and fields) being deposited at Land Registry offices across the island; the highest monthly figure recorded since May 2014 when 551 contracts were deposited.

From Land Registry figures available today (March 23) of those 501 contracts, 86% (442) were deposited by domestic (Cypriot) purchasers, while 14% (59) were deposited by overseas (non-Cypriot) purchasers. It is clear that the surge in property sales is due solely to increased demand from the domestic market.

Sales increased in all districts, with Limassol leading the way with an 85% increase in sales compared with February last year. Sales in Nicosia rose 76%, while those in Larnaca, Famagusta and Paphos rose by 52%, 30% and 18% respectively.

During the first two months of 2016 sales have risen 28% to reach 828. This exceeds the number of sales during January and February of 2013 that preceded the island’s bailout.

Total Property Sale Transactions – 2015/2016 Comparison

District Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Nicosia 2015 46 45 83 88 86 61 60 37 65 64 60 54
2016 54
 79
Famagusta 2015 16 27 17 17 21 33 45 14 30 29 33 42
2016 22
 35                    
Larnaca 2015 90 71 98 67 68 111 95 75 85 87 111 114
2016 78
 108                    
Limassol 2015 95 97 160 115 135 135 156 87 114 166 137 169
2016 92
 179                    
Paphos 2015 74 85 94 94 95 124 140 88 91 117 105 134
2016 81
 100                    
Totals
 2015 321 325 452 381 405 464 496 301 385 463 446 513
2016 327
 501                    

This significant surge in demand for property may be attributed to lower lending rates being offered by the banks and simpler procedures for granting loans, together with an improving economic climate and consumer confidence.

In the coming year we expect to see structural changes implemented to accelerate the issuance of Title Deeds. Whether this will enable Title Deeds to be issued by the time a purchaser takes delivery of a property remains to be seen; but things are moving in the right direction.

Domestic sales

Property sales to the domestic (Cypriot) market in February rose a startling 119% compared to February 2015, with sales reaching 442 compared with 202 in February last year.

Sales rose in all districts with Famagusta leading the way with sales up by a massive 1550%. Sales in Limassol rose 109% and those in Paphos rose 108%, while property sales in Larnaca and Nicosia rose by 102% and 94% respectively.

Cyprus Domestic Property Sale Transactions – 2015/2016 Comparison

District Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Nicosia 2015 39 36 71 74 74 58 56 36 55 60 50 44
2016 45
 70
Famagusta 2015 9 2 16 16 9 30 28 14 25 24 24 41
2016 20 33                    
Larnaca 2015 77 49 91 40 45 82 60 62 53 59 81 81
2016 67 99                    
Limassol 2015 71 77 147 90 86 100 123 65 81 127 82 123
2016 73 161                    
Paphos 2015 39 38 86 64 34 63 83 64 47 92 71 89
2016 68 79                    
Totals
 2015 235 202 411 284 248 333 350 241 261 352 308 378
2016 273 442                    

Domestic sales during the first two months of 2016 are up 64% compared with the first two months of last year with sales reaching 715 compared to last year’s figure of 437.

Overseas sales

In contrast with domestic sales, property sales to the overseas (non-Cypriot) market fell 52% in February compared with February 2014 with a mere 59 properties being sold compared with the 123 sold in the same period last year.

The fall in value of Sterling against the Euro and its further predicted decline in value should the UK decide to leave the European Union in the forthcoming referendum will have dissuaded many Britons from buying. Also property prices in Cyprus are still well above their main Europen competitors – Spain and France.

With the exception of sales in the capital Nicosia, where sales held steady compared to last year, the fell in all other districts.

Sales during February in Famagusta fell 92% compared to the same month last year and by 59% in Larnaca. Meanwhile, sales Paphos fell by 55% and dales in Limassol fell by 55%.

Cyprus Overseas Property Sale Transactions – 2015/2016 Comparison

District Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Nicosia 2015 7 9 12 14 12 3 4 1 10 4 10 10
2016 9
 9
Famagusta 2015 7 25 1 1 12 3 17 0 5 5 9 1
2016 2 2                    
Larnaca 2015 13 22 7 27 23 29 35 13 32 28 30 33
2016 11 9                    
Limassol 2015 24 20 13 25 49 35 33 22 33 39 55 46
2016 19 18                    
Paphos 2015 35 47 8 30 61 61 57 24 44 35 34 45
2016 13 21                    
Totals
 2015 321 325 452 381 405 464 498 301 385 463 446 513
2016 54 59                    

Overseas sales during the first two months of 2016 have fallen 46% compared with the first two months of last year with sales falling to 113 compared to last year’s figure of 209.

Cyprus Property Sale Transactions 2000 – 2016

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 (Feb)
 113 715 13.6% 828
Totals
 56,918 136,652 29.4% 193,570

Central Bank hopeful on property prices

Nigel Howarth
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1
Central Bank hopeful on property prices

Cyprus Central Bank hopeful on property pricesTHE CENTRAL Bank of Cyprus’ Residential Property Price Index for the fourth quarter of 2015 reports that property prices remained, on average, unchanged compared to the third quarter of 2015.

According to their report this is the first time since the third quarter of 2010 that the index is not negative and house prices have risen and that improvements in the local economy and financial conditions will have a positive effect on the real estate market.

(Figures just released by the Cyprus Statistical Service report that the island’s nominal gross domestic product rose 0.2 per cent in 2015 to over €17.4bn after shrinking 3.7 per cent in 2014. Last year’s real economic growth, which takes inflation into account, was 1.6 per cent. In 2014, Cyprus’ economy shrank 2.5 per cent in real terms.)

House prices increased by 0.5% while apartment prices fell 1.6% over the quarter.

The highest rise in the Residential Property Price Index was reported in Famagusta (+2.4%), while the largest fall (-0.5%) was reported in Nicosia. Meanwhile Paphos saw a quarterly increase of 0.4%, while property prices in Limassol remained unchanged and Larnaca reported a marginal fall of 0.1%.

On an annual basis, the Residential Property Price Index fell by 1.8% in Larnaca, followed by Limassol with 1.6% and in Famagusta with 1.5%; Nicosia remained unchanged.

According to the Central Bank overall prices of property in Cyprus have fallen 30.6% since their peak in 2008.

About the Property Price Index

The residential property price indices for Cyprus are constructed by the Central Bank of Cyprus’s Real Estate Unit (REU), which is part of the Economic Research Department, in collaboration with the member banks of the Association of Cyprus Banks (Bank of Cyprus, Hellenic Bank, Alpha Bank, National Bank of Greece, Emporiki Bank, USB Bank, the Cyprus Development Bank, Societe Gererale, Piraeus Bank and Eurobank) and the Co-operative Central Bank.

The indices are based on property valuation data collected since 2006 by the contracted banks, which receive the relevant information from independent property surveyors in connection with mortgage transactions, such as housing loans, mortgage refinancing and mortgage collateral. The data, which are representative of the Cyprus property market, cover all the areas under the effective control of the Republic of Cyprus (Nicosia, Limassol, Larnaca, Paphos and Famagusta) and refer to residential properties (houses and apartments).

The base period for all the indices is the first quarter of 2010 (i.e. 2010Q1=100). The Central Bank of Cyprus will be publishing the relevant data series on a quarterly basis.

Further information and explanations on the methodology used for the construction of the various price indices is available in the methodology report.

Title Deed applications exceed 8,000

Staff Reporter
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8
Title Deed applications exceed 8,000

ALMOST 8,500 buyers whose properties were used as collateral for loans by insolvent developers have applied to have them released, the interior ministry said.

A law allowing ‘trapped’ buyers to have their properties disengaged from developers’ obligations to banks was passed last September.

The bill was designed to sort out the mess created by the failure to issue Title Deeds to people who paid for the property, either because the property was mortgaged by the developer, or the state could not go ahead with the transfer because of outstanding taxes.

In other cases, Title Deeds have been issued to the developer but lenders’ claim on the property forbid the transfer to the buyer.

The law grants the head of the land registry department the authority to exempt, eliminate, transfer and cancel mortgages and or other encumbrances, depending on the case and under certain conditions.

78,000 cases

The matter concerns some 78,000 cases of buyers who either do not have a Title Deed for various reasons or the property has not been transferred to their name.

“As of today, 8,430 applications have been submitted, of which 3,000 relate to properties for which a Title Deed has been issued,” the statement said.

“Of these, 2,000 have already been processed and are in the process of being transferred.”

A total 80 Title Deeds have been irrevocably transferred, while in another 80 instances the parties involved arranged for a private transfer between them, and thus these applications are considered settled, the Interior ministry added.

The remaining 5,500 applications relate to properties without Title Deeds.

“It is noted that 30 per cent of Title Deed applications are with the relevant local authorities for the issuance of completion certificates or division permits,” the statement noted.

It added that significant delays are observed at local-authority level, owing to various irregularities, such as pavements, green areas, etc.

“With a view to facilitating and expediting the issuance of Title Deeds, we stress that as soon as the law on streets and buildings is passed, decrees on how to handle irregularities delaying the issuance of Title Deeds will be issued by the Interior ministry to local authorities,” the ministry’s statement said.

“It is hoped that in this way the issue will be regulated once and for all, and the issuance of Title Deeds for all property buyers will be expedited drastically.”

Rooting out corruption in Paphos

Bejay Browne
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10
Rooting out corruption in Paphos

corruption in paphosFOR THE PAST 20 years Paphos has been run by a handful of corrupt lawyers, developers and politicians, the mayor of Paphos has told the Sunday Mail.

“There has been a lot of development in Paphos over the last 20 years, but only for this group’s benefit; I see them as a group of criminals,” Phedonas Phedonos said in an interview this week.

He said the recent uncovering of a series of scandals involving millions of euros meant that the ‘abscess’ of corruption had been burst, but warned that he is currently investigating a further possible case though he could not yet reveal more details.

“As with other instances, I am investigating, and will then hand the information over to the police. The new case could involve a substantial amount of money and was carried out under the previous administration of [Paphos mayor] Savvas Vergas. I can’t say what it is at this time,” he said.

He reassured Paphos residents that though recent events may make it appear that Paphos led the way in corrupt practices, corruption had thrived in other towns for many years as well. It was just that it broke in Paphos first.

“We are really happy that we contributed to fighting corruption. In a small society like ours, it may be easy to hide fraud under the carpet, but it is also easy for it to be revealed. I hope the same will be done in the rest of Cyprus as well,” he said.

The mayor was speaking at the end of a week which saw a second major scandal break in Paphos leading to six arrests for alleged over-charging by the operators of the Marathounda waste disposal facility, run by a company called Helector.

The six are suspected of reporting higher waste volumes consequentially resulting in higher charges for local authorities and consumers. They face charges of embezzlement, squandering public moneys, corruption and bribery.

Shortly after becoming mayor in January 2015, Phedonos spearheaded the Paphos municipality’s decision to stop paying its dues to Helector last April. It had realised the prices they were called to pay ranged from €28 to €31 per tonne of waste whereas the real cost did not exceed €10 per tonne.

The alleged offences took place between 2008 and 2015.

Among the six arrested is former mayor, disgraced Savvas Vergas, who is already serving a six year prison term for the Paphos sewerage board scandal in which he and other municipal councillors were found guilty of receiving kickbacks.

The mayor said that, as in the case of the sewerage board case, if Helector is found guilty, the municipalities will be paid back any over payments.

“We will assert all legal claims, which will certainly be to the benefit of our residents,” he said.

Phedonos conceded that the ‘wounds’ left by having a previous corrupt mayor and officials were deep, but said he was sure Paphos could look towards the future with confidence.

He pointed to the eight infrastructure projects already underway and the hundreds of thousands of foreign visitors expected as Paphos takes over as European Capital of Culture in 2017 as examples of what residents could look forward to.

Underlying it all is Phedonos’ vision that the municipality can become a model of good governance based on transparency, fairness and effectiveness.

“If we want to restart our economy and society after the economic, moral and spiritual crisis we have gone through, it’s very important to clean the town from corruption,” he said. “If you don’t have this, you can’t have real economic development.”

The mayor revealed that he had been put under psychological pressure and on occasion threatened to stop investigating the waste disposal contract.

Earlier this week Phedonos described how in November last year, he received a letter from Helector threatening to sue him for libel after he spoke to the media about the contracts.

And in October the mayor received a letter demanding that unless Paphos municipality made its overdue payments (some €185,000) the site would stop servicing the municipality by denying access to municipality rubbish trucks.

“To those who are making these threats, I can say that they are clearly wasting their time,” he told the Sunday Mail.

Phedonos’ defiance and determination to fight corruption has led to comparisons with Auditor-general Odysseas Michaelides who has become a constant thorn in the sides of various ministries and municipalities as he uncovers alleged irregularities.

The mayor insists he is no hero, just a man who loves his home town, respects its residents and has a sense of responsibility to do his job. He said his only ambition is to try and work for a better and a fairer society.

“The town must have not just a mayor they trust. They must also be able to trust the municipality. It’s very important for people to trust the whole institution, the officers and the workers,” he said.

“Today I’m a mayor, maybe tomorrow I’m not any longer, so it’s important to have a clean organisation without corruption. This is a legacy I want to leave.”

The mayor stressed that Paphos was not a city of scandals and corrupted politicians, but a place that has proved it can achieve huge goals.

“As well as the cultural capital, Paphos is a popular tourist destination, with a past, present and future. It’s also a place that has learnt from its mistakes and should be proud of its achievements,” he said.

Bill to curb bank usury

Staff Reporter
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2
Bill to curb bank usury

Cyprus vote on bill to curb bank usuryCHAIRMAN of the House Commerce Committee DISY MP Zacharias Zachariou on Tuesday said the last details of the bill have been ironed out and it will go to a plenum vote on March 17.

The bill abolishes a number of charges banks impose on borrowers, including a fee to look over the loan application, a fee to monitor the loan transaction history, an insurance fee, added interest rates and other hidden fees. The bill also requires the banks to calculate interest rates at 365 days or 366 days in a leap year and not at 360 days, which is the current practice.

The bill also stipulates that the bank is no longer allowed to unilaterally demand of the borrower to pay off the entire loan, barring special circumstances.

The bill was drafted by main opposition party AKEL and DIKO. AKEL MP Yiannakis Gavriel called on the government to “stop catering to the banks and start listening to the people”.

Gavriel asked all borrowers who believe that they have fallen victim to unfair bank charges to present their case to the Office of the Financial Ombudsman so they can have an additional defence on their side in case they decide to take the case to court.

DIKO MP Angelos Votsis said that the bill aims to protect borrowers from unfair bank charges.

Zachariou clarified that the bill doesn’t extend to loans in foreign currency and that it will not be retroactive. He was referring to the case of borrowers who converted their loans to Swiss francs in exchange for lower interest rates. Following the financial crisis the exchange rate changed leaving many of the borrowers with huge debts.

Greens MP Yiorgos Perdikis said that he didn’t believe that the bill will pass, claiming that it “smells of referral”.

Bill to curb bank usury

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