Property sales in Cyprus is stagnant despite promising start
The number of properties being sold in Cyprus is continuing to decline according to government figures despite cuts in VAT and transfer taxes, and revised laws designed to improve consumer protection.
The Department of Lands and Surveys figure show that the number of properties being sold in Cyprus is continuing to fall. In March, a total of 563 contracts for the sale of property were deposited at Land Registries across Cyprus compared with the 625 deposited in March 2011; a decrease of 9.9% – and a drop of more than 70% when compared to March during the boom year of 2007.
Property sales climbed 54%, hitting an 18-month high in January and sales have continued to slide following a brief recovery during the first half of 2010. After an encouraging start to the year, when the number of properties sold in Cyprus increased for the first time in nineteen months, sales tumbled in February. Analysts stated that the earlier surge in sales may be attributed to people waiting to deposit their contracts of sale until after the recent tax reductions had been introduced. Domestic sales tumbled due to the lack of liquidity in the banking system, tightened borrowing criteria and a general uncertainty about the future of the economy; down 28.6% across the Island standing at 329 compared with 461 in February 2011.
The worst hit area was Larnaca, where sales plummeted by 78.1% compared with last year. Larnaca was followed by Paphos (-37.7%), Nicosia (-18.9%), Limassol (-14.8%) and finally Famagusta (-6.7%).
Meanwhile, an online poll carried out by Cyprus Property News has revealed that Property prices in Cyprus are expected to slide further over the course of 2012. Nearly 70 per cent of respondents anticipate the value of real estate in the country will fall this year, with just 11 per cent predicting a rise. The remaining 19 per cent of those believe property prices will remain unchanged. The publication pointed out that this comes despite various measures introduced by the Cypriot government in a bid to boost the island’s real estate market.