Cyprus property market shows weak signs of growth

Nigel Howarth
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2

A SIGNIFICANT number of European residential property markets are starting to recover with both sales and prices increasing, according to a new report from RICS (Royal Institution of Chartered Surveyors).

The worst performing markets of 2009 were Ireland, Spain, Greece, and most central and eastern European countries. The Baltic States were hit particularly hard with price falls ranging from 27% to 53% in 2009. Together, these countries form a geographic ‘unlucky horseshoe around the edges of Europe’, according to reports author, Professor Michael Ball.

Over supply is likely to hold back recovery in some countries, most notably in Spain, Cyprus and Ireland where both unsold holiday homes and primary residences could bring these markets further problems, the report also points out.

According to Land Registry statistics, the number of property sale contracts deposited by non-Cypriots in 2009 was down 73% on the 2008 figure and down by 84% on the number deposited in 2007.

In addition to the well known problems blighting the Cyprus property market, this fall reflects the bursting holiday home bubble around the Mediterranean as a whole.

Towards the end of 2009, some buyers entered the market given the signs of some growth, but the flat or contracting economy, the risk of higher euro zone interest rates and the glut of properties on the market currently don’t give much hope for 2010.

Speaking to the Cyprus Weekly, RICS Cyprus executive board member Pavlos Loizou MRICS, said: “In 2009, the residential market in Cyprus experienced price declines between 10-15% in Nicosia and the other cities, 25% to 30% in the tourist areas and between 10-20% in permanent residence areas.

There are limited signs of recovery within 2010, and Cyprus will continue to experience a depressed market.”

The RICS European Housing Review is available at http://www.iut.nu/Facts%20and%20figures/RICS/2010EuropeanHousingReview.pdf.

Cyprus changes estate agents law following EU inquiry

David Crowther
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6

Cyprus opens its doors to European estate agentsEARLIER today, the Interior Ministry submitted a new draft law to Parliament which is designed to open the doors to European estate agents wishing to practice in Cyprus.

The changes to the law result of an earlier EU inquiry into Cyprus’ restrictive practices that penalised estate agents from other EU-member states wishing to practice on the Island.

As a result, the Commerce Ministry prepared a bill designed to bring the Island’s existing estate agent’s laws into line with the Acquis Communautaire with the assistance of the legal service and the Estate Agents Registration Council.

Changes to the existing law relate to the establishment of companies as real estate agents, the professional qualifications of real estate agents, the provision of services by real estate agents situated in other European Union member-states and the examination that EU real estate agents must take if they wish to settle in Cyprus.

The new law provides for all individuals who have graduated from a secondary school in a European Union member state and are actively involved in real estate who will now be able to register with the Estate Agents Registration Council providing they prove that they have a minimum of five years experience in the market.

A copy of the draft law has been sent to the European Commission.

Latest property sale figures for Cyprus

Nigel Howarth
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1

ACCORDING to the Lands and Surveys Department figures issued yesterday, 704 contracts of sale were deposited at Land Registries throughout Cyprus during February 2010; an increase of nearly 30% on the 558 contract deposited during February 2009.

In the first two months of this year, 1274 contracts were deposited and their overall numbers are up 27% compared to last year.

However, although these figures are encouraging, they are still down by almost 60% on the 2008 figures and it is unclear whether the increase has been driven by domestic or foreign demand. (The Department should be publishing the number of sales to foreign buyers in the next few days).

Sales of property in Cyprus February 2010
Property Sales (Source: Department of Lands and Surveys)

In efforts to stimulate sales developers in some areas have been offering discounts of up to 30% and other sales incentives, but these will soon run out according to Solomon Kourouklides, president of the Cyprus Real Estate Agents’ Association.

Speaking to Stockwatch last month, Mr Kourouklides said that signs of an improvement were still confused. “The latest increase is attributable to the opportunities in the market. Many Cypriot individuals and investors have bought properties from non-Cypriots or Cypriots who cannot pay off their loans. But these opportunities will run out”. Adding that “If the economic parameters remain the same, we believe that the market will remain at the save level as in 2009, while there is a possibility of a slight deterioration”.

Cyprus government extends water saving subsidies

David Crowther
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1

THERE is a €3,000 subsidy for the installation of a system to recycle grey water (water used in the bath, wash-basins and laundries, but not toilets or the kitchen sink). The recycled water could be used for the irrigation of gardens.

Besides households, the scheme applies to schools, sports grounds, gyms, hotels etc, which are connected to a public water supply network and a central sewage system.

The subsidy for premises other than private houses covers 40% of the total cost to a maximum of €7,000.

Another subsidy scheme covers the drilling of a borehole for irrigation of gardens in private houses connected to a public water supply system. The amount of the subsidy is €700. There is a further €700 subsidy scheme for connecting the borehole to the toilet flush.

The WDD offers another scheme for the installation of a hot water circulation pump available for houses, offices, shops and foundations, worth €220.

Applications for all four schemes should reach the Water Development Department by December 6, 2010.

Low-end portal users return

Nigel Howarth
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2

THE RESURGENCE of interest in international property shows no sign of slowing according to the latest Primelocation International Search Index. Searches for international property in January were up by 25% on December and by 134% compared to January last year.

Although France, Spain and Australia received the most searches, emerging market destinations such as Bulgaria and Turkey recording the highest monthly increases of 55% and 60% respectively. The number of searches for Cyprus property was also up by 55%.

Australia shot up to sixth place in January, having not featured in the top ten since October 2009. Most buyers considering the country are likely to be planning a lifestyle rather than an investment purchase and the increased popularity of Australia and some of the less traditional European destinations may also be explained by their warmer climates, attractive at a time when Britain continues to experience a series of cold snaps.

Overseas property searches January 2010
Source: primelocation.com

Ann Wright, International Development Manager at Primelocation.com, comments:

“The upsurge in interest in international property shows no sign of abating: January is the third consecutive month to have recorded an annual increase in searches of more than 100%”.

“Initially the upswing was driven by the super-rich and City workers, looking for luxury second homes and residences in lower tax environments, but these latest figures show that the rest of the market is catching up. The strong growth in Australian searches and the comparatively average performance of Switzerland – a favoured destination of the super rich – shows that the market is not being carried along by a small group of potential buyers, but that foreign home ownership is now once again on the agenda for a broad spectrum of the home buying public. And as Britain spent much of January covered by a blanket of snow, it is perhaps not surprising that potential buyers were more attracted to sunny Australia than the Alps.”

“The strong performance of countries in the lower half of the list suggests that a renewed sense of confidence is now beginning to filter through and the market is less dependent on top-end buyers.”

Cyprus refugees to get Title Deeds

George Psyllides
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1

INTERIOR Minister Neoclis Sylikiotis told the Cyprus Mail that an effort is being made to issue Title Deeds to those refugees living on Turkish Cypriot land through agreed procedures with the legal owners.

After 1974, the Republic put all Turkish Cypriot properties under the guardianship of the Interior Minister, who prohibits their sale, exchange and transfer because of the state of emergency.

However, without following proper expropriation procedures, the Republic took large expanses of Turkish Cypriot-owned land for development projects and for refugee estates.

The minister said there have been Turkish Cypriots willing to come to an agreement where their land was used to house Greek Cypriot refugees.

Sylikiotis said the government avoids expropriating the land as legal complications could arise.

In one such case the court ruled in favour of the owner and also rejected a subsequent appeal.

For the time being, those living on estates build on Turkish Cypriot land will receive an ownership certificate until the issue is resolved with the legal owners of the property.

The certificate can be used to mortgage the property.

Meanwhile reports suggested the government prepared a bill amending the law on the Guardian of Turkish Cypriot properties in a bid to tackle appeals before the European Court of Human Rights.

The new provisions allow the Guardian, who is the interior minister, to return Turkish Cypriot properties or pay compensation or both where he deems necessary.

This practice has been used in the past but it was never enshrined in the law, the reports said.

It also makes clear that any claims should go through the courts of the Republic of Cyprus.

The reports said these changes were aimed in preventing any court decisions that would reverse the role played by the Guardian.

It is believed the changes were prompted by a recent case before the European Court of Human Rights in which the Republic agreed to pay a Turkish Cypriot €500,000 as damages for loss if use of one-and-a-half houses (she is co-owner in the second) in Larnaca in which Greek Cypriot refugees are living.

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