Cyprus Real Estate News and Property Market Reviews

Returning interest in property investment overseas is fuelling recovery in a number of European destinations including Cyprus, it has been reported.

According to the latest Wealth Report compiled by Knight Frank and Citi Private Bank, many wealthy individuals regard property to be one of the best assets to have. A total of 71 per cent of those questioned claimed that 2010 would be a good time to make a property purchase, with its “tangible and straightforward” nature making it a good investment during tough economic times.

After a turbulent 2009 for the Cypriot housing market, news that property sales are beginning to pick up is likely to be welcomed by investors. Many overseas investors are looking for long-term returns and they are buying cheap and distressed properties in the country and waiting for improvements to materialize.

Many overseas investors are buying up distressed property from individuals who are struggling with loan payments. Solomon Kourouklides, president of the Cypriot real estate agents association said that the growth was probably a result of more opportunities opening up for buyers in the marketplace.

According to the figures released by the Department of Land and Surveys organisation, real estate sales were up 11 per cent during April, compared to 2009, and up 25 per cent in the first quarter of this year in comparison to last. Besides, the figures reveal that demand for foreign property was also beginning to re-appear, after a number of investors fled the market during the country’s economic troubles.

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Property sales in Cyprus are edging upwards, the latest statistics from the country have suggested.

According to The figures, reported by Property Wire and released by the Department of Land and Surveys, the rise in property sales is occurring at a slower pace than in previous months, but it remains positive. In good news for property investors in Cyprus, The real estate sales were up 11 per cent during April, compared to 2009, and up 25 per cent in the first quarter of this year. But the growth is down in comparison to the figures that the organization reported for March, which showed a 37 per cent y-o-y growth in sales.

Property sales in Nicosia have increased and are likely to be business acquisitions as Nicosia is not a destination favored by tourists and holidaymakers. Property agents in Paphos and Limassol have reported increased interest. The coastal destination of Paphos was the best performing area, posting a 12 per cent growth in interest in March when compared to February’s figures. The housing market in Cyprus is hoping that the long awaited changes to title deed legislation will help restore investor confidence in the market.
Nearly 130,000 properties in Cyprus are currently without title deeds, according to official estimates. Recently, The Council of Ministers approved six bills concerning reforms to the legal framework governing building permits and the issue of title deeds which is positive news for overseas property investors looking for property in Cyprus. Meanwhile, developers in Cyprus are adjusting its marketing strategy in an attempt to tempt a glut of more up-market overseas buyers. Luxury developments are to be aimed at wealthier buyers in the Middle East.

In related news, Developer Aristo confirmed it is launching a luxury range of properties likely to be marketed through agents in Middle East. Its other properties are aimed at middle to low end buyers from the UK, Scandinavia and central Europe.

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The Cypriot property market has received a much-needed boost after news emerged that the Government of Cyprus and Qatar signed a number of agreements including a construction project opposite the Hilton Hotel in Nicosia that will include a five-star hotel, a shopping mall, offices and a residential complex.

According to reports, the Cypriot government and Qatari Diar Real Estate Investment Company agreed to set up a joint venture for the development of a leisure complex, with the initial investment exceeding 150 million dollars targeting rising numbers of visitors to the east Mediterranean island. The agreements and memoranda were signed at the Presidential Palace in Nicosia during official talks between delegations of Cyprus and Qatar, headed by President Demetris Christofias and the Emir of Qatar Sheikh Hamad Bin Khalifa Al Thani.

Officials said that the first phase will include a five star hotel, while the second phase will encompass apartments and offices. The area allocated for the complex is close to the commercial hub of the capital and is expected to cover 50,000 square meters.

Finance Minister Charilaos Stavrakis said that they aim to finish the hotel construction in 30 months and added that the Cypriot government would make sure that the project is completed within the set timeframe.

Replying to questions as to Cyprus’ fiscal deficit and public debt, he said that Cyprus is in a better state as the average numbers in the Eurozone. The Minister said that the project would create jobs and bring state income through VAT.

According to the Cyprus Mail, Real estate and property consultant Antonis Loizou said that the development will bring with it a number of benefits for the country.

“The first and main one is that it is an expression of confidence to the Cypriot economy, which is good. At this point interest from Arabic countries to buy properties in Cyprus is very limited. This will open doors in oil-rich countries,” Mr. Loizou told the news provider.

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Investors have paid the highest price for an inner-city plot in Stassicratous, Mnassiadou and Princess De Tyra streets, Nicosia when they bought a parcel of 2,000 sq.m. off Makarios Ave. for a record EUR 18.25 mln. The deal went ahead despite the economic crisis, suggesting that there are bargain deals to be made and strengthening the belief that property in Cyprus hardly ever loses value.

According to financialmirror.com reports, the purchase from Hayasa Properties also generated EUR 3.2 mln in capital gains tax, in addition to a transfer fee of EUR 1.45 mln, which left the Inland Revenue Service very pleased. The buyer, Hayasa Properties Ltd, said that the new purchase will be developed into a multi-storey venture that will include a modern boutique hotel, commercial and residential space and the capability to rise up to 18 floors with five underground levels. However, plans are still at an early stage and a development project has not yet been finalized.

Martin Pearce, UK sales manager for Aristo Developers, has told the Liverpool Echo that Nicosia presents the perfect opportunity for property investors and the upward pressure for property due to the city’s developing significance as a financial and business hub is raising prices and in turn leading to “increased monthly rental rates”.

The expert stated that tenants are “able to pay well” for the right home, with a good year-round demand in Nicosia as the city is developing and advancing its international reputation.

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There is every reason to believe that the Cyprus property market can come out of the credit crunch. Although the Cyprus economy is still in recession it may have started to climb out in the fourth quarter of 2009, according to the latest estimates from the Cyprus Statistical Service (CYSTAT).

In the fourth quarter of 2009, Cyprus GDP shrunk on a seasonally adjusted by just 0.3% compared to the previous quarter and by 2.7% compared to the corresponding quarter of 2008. Only 1,800 Cyprus properties were sold to non-Cypriots in 2009. This compares to over 11,000 in 2007. According to the latest figures from the Cyprus Land Registry, 158 contracts of sale were deposited by non-Cypriots at the Land Registries throughout Cyprus in November, compared to 117 in October. Cyprus is one of very few countries to produce official data on the number of homes sold to foreigners, so a comparison with other similar markets is difficult.

While Cyprus may well have seen the fewest foreign sales in 2009, it could well see the same level of rebound as seen elsewhere as 2010 progresses. At this time of year when sales traditionally slide off, the increase in sales in November signifies that the Cyprus property market will recover quickly as the international economic recovery gathers pace. At the first signs of recovery, and demand growing for overseas property, demand has begun to increase for Cyprus property. The title deeds crisis has also been a massive barrier to sales, but there is hope that this is now resolved by new government legislation.

Les Calvert director of overseas property portal Property Abroad.com said that Cyprus’ new golf courses and proposed 2nd Eurodisney as reasons to believe that Cyprus property has a bright future.

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Investors have paid the highest price for an inner-city plot in Stassicratous, Mnassiadou and Princess De Tyra streets, Nicosia when they bought a parcel of 2,000 sq.m. off Makarios Ave. for a record EUR 18.25 mln. The deal went ahead despite the economic crisis, suggesting that there are bargain deals to be made and strengthening the belief that property in Cyprus hardly ever loses value.

According to financialmirror.com reports, the purchase from Hayasa Properties also generated EUR 3.2 mln in capital gains tax, in addition to a transfer fee of EUR 1.45 mln, which left the Inland Revenue Service very pleased. The buyer, Hayasa Properties Ltd, said that the new purchase will be developed into a multi-storey venture that will include a modern boutique hotel, commercial and residential space and the capability to rise up to 18 floors with five underground levels. However, plans are still at an early stage and a development project has not yet been finalized.

Martin Pearce, UK sales manager for Aristo Developers, has told the Liverpool Echo that Nicosia presents the perfect opportunity for property investors and the upward pressure for property due to the city’s developing significance as a financial and business hub is raising prices and in turn leading to “increased monthly rental rates”.

The expert stated that tenants are “able to pay well” for the right home, with a good year-round demand in Nicosia as the city is developing and advancing its international reputation.

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Bargain prices in Cyprus combined with its huge discounts make it a tempting proposition for overseas investors and the property market in Cyprus may be picking up again, according to one property expert.

Overseas Property Professional (OPP) has reported that Purple International saw a sharp rise in sales in the second half of last year in response to huge discounts designed to tempt buyers back to the market. OPP also drew attention to a shift into the type of lifestyle purchasers and people relocating to warmer climates increasingly replaced the typical investors. Some buyers were able to pick up property with discounts of as much as 30 per cent.

Angelos Koutsoudes, managing director and partner at Purple International, told OPP “The first half of 2009 was dire but the second half was brilliant. Because of the volume we sell and … connections with developers, we are able to negotiate big discounts.”

In related news, Graham Norwood draws attention to the cheap prices developers and estate agents are offering to tempt UK buyers back to its market. Property prices have wintered a negative pricing adjustment as the country was hit by the global effects of the credit crunch meaning it is now cheaper to buy property on the island, according to Dailymail reports.

Justin Stayles of PropCyprus told the paper said: “Prices are just about stabilizing after a long period of freefall. If you’re going to buy at the bottom of the market, get in quickly.”

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Cyprus still has an advantage over Europe concerning the potential growth rate of its economy despite the global financial crisis.

Speaking after a meeting with political party representatives and social partners, as well as government officers, to discuss the European Commission document on the future of the Lisbon Strategy, Minister of Finance Charilaos Stavrakis said that the challenge now is to maintain this “‘potential advantage” and the Ministry of Finance would be doing everything it deemed right to solve structural problems that have been to the detriment of society for many years.

He recalled that the potential rate of growth in Cyprus was historically around 4% and, due to the global crisis and the recession, it has dropped to 3-3.5%. He pointed out that ”the respective rate of the European economy is 2% and has now dropped to 1-1.5%.”

The Minister noted that the government has already presented a comprehensive package of proposals, which could solve the structural problems of the Cypriot economy, increase the growth rate and reduce unemployment, adding that some of the measures need more processing and approval by the House of Representatives.

Meanwhile, a recent study conducted by investment website Homes Overseas indicated that Cyprus is still a popular destination for those considering overseas property investments. The island offers bargain getaways that will help travelers escape the bad news of the current economic climate.

According to the Times, The country offers Mediterranean food and weather, advantageous tax laws, English language radio stations and the combination of being under five hours away by plane and a minimum temperature of 15 degrees Celsius, even in winter, makes the destination ideal for a holiday home for Brits.

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A couple who invested in property in Kato Paphos, Cyprus has said they chose the region for its peacefulness and popularity with British people.

According to the Sunday Mail reports, Don and Christine Stark, who both work in the aviation industry, bought their home after a friend recommended they take a holiday on the popular island. They now preferred quieter holidays and wanted to invest in property that would give them a good return.

Mr. Stark said: “It’s a beautiful place – the scenery is stunning and the biggest plus point has to be the year-round sunshine. Our friend had bought property in Cyprus and had retired out there.

The couple found their dream home at the Paradise Gardens II development, with two bedrooms, an open-plan living space, a large garden for sunbathing and barbeques which boasts a communal pool and is a 15-minute walk from the harbor. The property is suitable to be rented out when the couple and their families are not staying there.

Meanwhile, another couple from UK, Robert and Adele Philliben told the Sunday Mail that they bought two one-bedroom apartments at the Arcadia Gardens development in Ayia Napa.

Robert told the newspaper: “We settled in Cyprus because it’s so popular with British people. The similarities of the legal system meant that buying wasn’t difficult and we thought we’d never struggle to rent out our property so that clinched it.”

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There is a lot of doom & gloom in the Cyprus property market at the moment, there is every reason to believe that the Cyprus property market can come out of the credit crunch, in as good a shape, according to overseas property portal Property Abroad.com.

Les Calvert director of overseas property portal Property Abroad.com said:

“We have every reason to believe that the Cyprus property market will recover quickly as the international economic recovery gathers pace. There have been many problems with fraud over title deeds, and yes, now the economy has fallen into recession, but we have faith that things will recover pretty quickly once the international recovery begins, especially when there is economic recovery in key Cyprus markets like the UK.”

Les gave a reason for his strong belief in the Cyprus property market that the credit crunch will actually have a benefit. Because so many people lost money on developments that will never be completed, buyers are increasingly keen to do their own research. For that reason the problems that Cyprus has had with title deeds needn’t stop people from buying in the country.

The portal suggested that the rate of decline of property prices in Cyprus is now slowing every month. Slowly but surely it is reaching the bottom. The massive slide in Cyprus property transactions, especially those involving foreigners will have stopped by the end of this year. With more bargains available, investors are obviously keen to buy in the country at just the right moment, so it will, not only not lose any value, but stands to gain it very quickly as demand grows to normal levels once again.

As property prices in Europe’s most popular destinations grew immensely, Cyprus will become the inexpensive choice, and it is set to become one of the most popular destinations in Europe for British property buyers as it got the emerging market seal of approval celebrity golf course development.

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