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Cyprus Building Permit Statistics: April 2007

Nigel Howarth
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Figures just released by the Cyprus Statistical Service show that the number of building permits authorized by the municipal authorities and the District Administration offices during April 2007 stood at 749.

The total value of these permits reached CYP 139.5 million and the total area 324.5 thousand square metres. These building permits provide for the construction of 1,731 dwelling units.

During the period January – April 2007, 3,286 building permits were issued, registering a reduction of 0.2% compared to the corresponding period of the previous year. The total value of these permits increased by 21.9% and the total area by 13.1%. ?he number of dwelling units recorded a rise of 16.6%.

Building permits constitute a leading indicator of future activity in the construction sector.

Property Tax Here to Stay – Sarris

Editorial
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THE government turned down calls to slash property taxes amid findings that a staggering £241 m flowed into state coffers last year, a six-fold increase since 1998.

“We say no to a review of our tax system on immovable property“, Finance Minister Michalis Sarris told reporters.

Sarris said the 632% tax rise between 1998 and 2006 is owed to the Cyprus’ high rate of economic growth and not to undue taxation.

According to figures provided by the Cyprus Association of Property Owners, the state earned £33m in property taxes in 1998. That jumped to £241 m in 2006 and is expected to further increase by 133% this year.

Sarris said tax revenues aren’t on a steep incline, but experience fluctuations according to the economy’s performance.

But the minister was challeged by opposition Disy that said property values had reached “disconcerting levels” that warranted a tax review.

Grants

Disy deputy leader Averof Neophytou said the current state of the property market harks back to the 1980s when a property boom translated into a steady stream of tax hikes.

“Today we’re going through a crisis in our tourism product and if steps aren’t taken over property sales, then we’re going to be faced with a new huge crisis” said Neophytou.

The Disy official suggested that capital gains driving the property prices upwards be slashed.

“It’s unacceptable that of the £100,000 needed to buy an apartment, £49,000 goes towards states coffers,” he said.

Akel MP Stavros Evagorou said opting to either reduce or get rid of property taxes altogether isn’t the answer because any tax breaks would benefit big business and not ordinary homebuyers.

Instead, he proposed a government housing policy that would give young couples a break towards the purchase of a new home.

Evagorou said the government could return some of its tax revenues to couples in the form of grants provided they meet specific income criteria.

Property taxes came to the fore after the Cyprus Association of Property Owners came out with calls for tax relief. Association Chief George Strovolides said private property that is the engine driving the island’s economy is so overtaxed that it’s among the highest in Europe.

He told a news conference high taxation lead some property owners to resort to evading taxes altogether.

Moreover, the problem would be compounded by the 15% Value Added Tax that would be tacked on all land transactions as of January 1st, 2008.

A 15% VAT already exists on the purchase of new houses.

“Land is easy ‘prey’ for tax authorities… The existing system offers motives for tax evasion,” said Strovolides.

Instead, the Association proposed four ways that if implemented, would act to correct what it called “distortions” in the market.

Ceiling

First off, the Association proposed that either defence tax be dropped from rent, or that rent is taxed on income as profit.

Second, capital gains tax should be halved to 10% and the current £10,000 tax-free ceiling should be upped to £58,000 or €100,000.

The tax-free ceiling for a first home should be raised from £50,000 to £116,000 or £200,000.

Third, transfer tax should be scrapped in cases were VAT is paid. A flat 3% tax should apply in all other cases.

And fourth, either a property ownership tax is scrapped altogether, or a universal rate of 25% be imposed on property worth over €1m in January 1, 1980 prices.

Copyright © Cyprus Weekly, 2007

The Cyprus property industry must be brought up to scratch

Editorial
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Tourism may be falling, but its decline is being offset by the health of the property and building sector, which has shown steady increases over recent years, to become one of the pillars of growth in our economy.

Figures released this week show that 2007 looked set to become a record year in property transactions, with the first three months alone registering £560 million in property sales, compared to £1.7 billion for the whole of 2006. In May 2006, the average house price in Cyprus was just over £97,000, up 4% on the same time last year.

Rising figures for mortgages issued by the banks show that this is not a phenomenon purely driven by the booming expatriate market as does the fact that Nicosia tops the property demand list, ahead of coastal areas like Limassol and Paphos.

This is good news, making the market less susceptible to the whims of foreign buyers who can abandon Cyprus as easily as they came. It also means that local buyers – including first-time buyers – are finding a way to lock into the property ladder, securing a stake in a sector of the economy that is expected to see continued steady growth.

But it is not by all means good news. Cyprus is developing a reputation among overseas buyers as something of a cowboy market. Horror stories of shoddy builds and rogue developers can spread like wildfire in the expatriate community, while television property shows are spreading the reputation abroad.

While there is no doubt that most buyers are very happy with their dream homes in the sun, it is equally certain that some people have good reason to regret the day they decided to buy in Cyprus.

If the woes of a minority are not to tarnish the reputation of Cyprus as a whole, a number of issues needs to be addressed. First among them is the shocking delay in issuing Title Deeds. Something needs to be done about those developers mortgaging properties to finance their next build, leaving buyers without Title Deeds until the developers have paid off debts to the bank.

Also, buyers must have hope of redress, perhaps in the form of an independent regulatory body in cases of mis-selling, of properties not matching specifications, of sub-standard work occasioning huge repair bills within months of properties being handed over.

Expatriates may be the ones who complain the loudest. They are also the ones who are the most vulnerable to exploitation and have the least recourse through their inability to navigate the system. But these issues affect everyone in Cyprus, and improvements would be to the benefit of all, safeguarding the future of what has become one of the planks of our economy.

Copyright © Cyprus Mail, 2007

Cyprus plot prices boom

Editorial
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The latest increase in property prices is beyond forecasts. According to the new study of the Cyprus Real Estate Agents Association to be published in the next few days, the increase in plot prices in the domestic market will exceed 20% in 2007.

The study, which concerns the first half of 2007, shows a slowdown in the offer of housing plots and an increasing demand. “This pushes prices sharply up and we expect that increases will exceed 20%. This is a surprise“, Chairman of the Association, Solomon Kourouklides told StockWatch.

The land valuators seem to agree. Vice Chairman of their Association, Charalambos Petrides anticipates that plot prices will increase by 15% – 25% in 2007.

The boom in the property market is also depicted in the state revenues from the capital gains tax. According to latest figures, the capital gains tax collections reached £100.4 million in the first five months of 2005 compared to £36.2 million in the corresponding period of 2006 and £18.8 million in 2005.

Demand by developers / individuals

According to Mr. Kourouklides, the increased demand derives from the developers and the individuals. “The developers rush to buy housing land before the imposition of the 15% VAT. On the other hand, the consumers take housing loans more easily. The increased demand is linked to the imposition of VAT from January 1, 2008“, he added.

Offer

As regards to the houses and flats, the study reveals that offer has accelerated but demand remains stable. The house and flat prices will increase by 2% – 4% in the first half of 2007 and by 5% or 9% in the full year 2007.

20% demand by foreigners

According to Mr. Kourouklides, it will be seen in the next few months whether the increased offer of projects will be absorbed by the market. “The property market is not a stock exchange, where prices react on a constant basis. The investments in properties are middle-long terms investments“, he noted.

Mr. Kourouklides also said that the demand for properties by foreigners is 20% of the total demand and concerns cities near the sea.

Taxes

The increase in property prices boosts protests that favour the reduction or abolition of certain taxes imposed on properties. According to a StockWatch report released yesterday, Cyprus Property Valuators Association had recommended 12 measures for the correction of the property prices. The measures include the abolition of transfer fees, the more effective exploitation of the housing zones and the construction of road networks to all housing areas.

© 1999 – 2007 Stockwatch Ltd.

Nothing in site for villa victims

Penman - Sommerlad
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Scam AlertON paper it looked like a great deal. A property in the sun for half the market price and all you have to do in return is let the developer rent the place for six months a year for 10 years.

When the 10 years is up the house in Cyprus would be yours for good.

Unsurprisingly, there were plenty of takers who poured in nearly £3million between them.

Two years later, the four sites around Paphos are still just that – building sites.

The developer Ian Beaumont has done a runner and some victims don’t even own the land he left behind.

Scores of Brits shelled out on average £60,000 towards the final cost of the properties. What they got is worth far less.

Peter Bayliss, from Southampton, paid a deposit of £48,000 for a three-bedroom townhouse.

“We did all the research we could and were assured that he had built previous developments and would deliver. But two years down the line there is still no sign of building.”

Dave Goodman, of Desborough, Northants, also paid £48,000 and said: “I’ve lost the lot.”

Jon Fox, from Huddersfield, West Yorks, paid £75,000 for his house but says he has no idea what happened to his money: “There’s a trail of lies and deceit.”

Some victims paid their money into the account of Beaumont’s firm J&I Estates at the Birmingham branch of Laiki Bank.

BUT most paid their deposits into a UK account held by J&I’s “sole agents” Peter Stephenson Properties.

Andrew Nolan was PSP’s Paphos branch manager at the time and insists he was not to blame. He says J&I built its offices in Paphos and came highly recommended.

Nolan added that individual investors were responsible for hiring their own solicitor to check whether the prices were fair and if the land and building permits were secure.

We last met Nolan four years ago, after he was banned from serving as a company director for the maximum possible 15 years.

A judge then branded Nolan a “complete fraudster” after his insurance company One Call Insure Direct went bust with debts of £2.3m.

Accountants found a £722,000 black hole in the company’s accounts but Nolan had fled to his villa in Cyprus.

He’d already clocked up a four-year boardroom ban in 1993 when his CCTV outfit Crimewatch (UK) was shut down with debts of £100,000.

Now working in the UK as PSP’s development manager, Nolan says it banked £2.2m for J&I but passed it all on Beaumont.

He says he was due to earn 10 per cent commission but actually only got 6.7 per cent before J&I went under.

“It is not unusual for late delivery of properties and several other developers are currently a year or more late in delivering homes,” he adds.

Hardly what you want to hear from your estate agent but neither is this: “The clients have not lost all their money but it is horribly tied up in the land and will be some time, probably years, before it is all sorted out.”

He says that a deal is being hammered out for victims to get their money back at some point. We’d love to speak to Beaumont about this and we’re not the only ones.

We know that he admitted to investors last November that he didn’t have enough money left to build their homes.

According to Nolan, Beaumont blamed Cypriots for delays and spiralling costs.

Beaumont is apparently in the Czech Republic, starting a new life. Unlike his victims.

Penman & Sommerlad 21st June 2007

http://www.mirror.co.uk/news/uk-news/investigate-nothing-in-site-for-villa-victims-484545

Cyprus Building Permit Statistics: March 2007

Nigel Howarth
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Figures just released by the Cyprus Statistical Service show that the number of building permits authorized by the municipal authorities and the District Administration offices during March 2007 stood at 986.

The total value of these permits reached CYP 170.8 million and the total area 389.0 thousand square metres. These building permits provide for the construction of 2,213 dwelling units.

During the period January – March 2007, 2,537 building permits were issued, registering a reduction of 0.9% compared to the corresponding period in 2006. The total value of these permits increased by 18.7% and the total area by 8.5%.?he number of dwelling units recorded a rise of 15.7%.

Building permits constitute a leading indicator of future activity in the construction sector.

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