Cyprus Property Forum for Buyers, Sellers & Investors

Cyprus Property News we thank you: You have established a medium that was long needed...

I have been following your publications/news closely. Agreeably you have stated that the Cyprus real estate industry is undergoing a crisis. It would be interesting however to hear the opinion of your medium and/or the "experts" on the potential of the island's real estate industry. It is also agreeable that real property sales especially to foreigners have dropped substantially. But what is happening in other competitive markets? Have sales there dropped as well? And what was the percentage drop there? You see, comparing sales performance with previous months/years is only part of the picture... and one cannot make a deduction based on these data alone. It would be very interesting as an investor to locate the markets that had less of a drop.

Thank you,

Hi Harris - thank you for your comments & welcome to the forum.

From the other articles I've read, it seems that the property market in Cyprus is going to take some time to recover. But having said that I have spoken with a couple of Limassol-based developers that focus on the residential market - and although sales are down, they are still doing OK.

The main problem as I see it is the thousands of poorly constructed over-priced concrete boxes that developers have thrown up in recent years aimed at the bottom end of the market. For whatever reason they chose quantity over quality - and this coupled with the financial uncertainty and all the numerous scandals that have now come to light means that they are just not selling.

The up-market developments, such as the Limassol marina, seem to be selling well.

Cyprus gets a lot of foreign revenue from overseas property sales. In 2007, the best year on record, foreigners bought a total of 11,281 properties - in the first 10 months of this year they have bought a mere 1,593. So there has been a substantial reduction in the amount of money coming into Cyprus - which impacts the overall economy.

As to what is happening in other parts of the world and investment comparisons, take a look at the 'Global Property Guide'.

Regards,

Nigel thanks for the reply. Visited the "Global Property Guide" website. Interesting and rather optimistic about Cyprus...

In regard to your comment on quantity over quality, I agree! These developers characterized by mediocrity, lack of vision and aesthetics will now suffer more than most... It is a pity that the state does not have an efficient mechanism to prevent such actions... Anyhow, the market at the end of the day will correct itself.

I believe you will find this article of interest: http://www.pytheas.net/docs/20101018-Cy ... owdown.pdf

Hi Harris,

Thanks for the link - as you may be aware, much of the information in that newsletter has been copied from my news magazine - from the bottom of page 2 to the top of page 5 are verbatim copies of my articles!

Cheers,

Probably, CPN is one of the sources. What I find interesting about this article is the positive "macro" outlook of the real estate industry of Cyprus...

If the Cyprus Government can sort out the Title Deed mess - and the nefarious activities of some of the developers here, Cyprus has a lot to offer.

Cheers,

Nigel Howarth wrote:If the Cyprus Government can sort out the Title Deed mess - and the nefarious activities of some of the developers here, Cyprus has a lot to offer.

Cheers,

I deeply agree with your words Nigel. The government must do something about this for the development of country's real estate industry. Hopefully, we can see the progress of it this new year.

Yes, more decisive steps need to be taken to eliminate delays related to the issuance of title deeds but these are not enough: The banking, tourism and real estate industries have to be reinforced in each and every possible way! Corporate and personal income taxes have to remain intact. Incentives, especially for foreign investors but also for private local ones have to multiply. Prudential controls towards cooperative credit societies should become stricter. Procedures within the governmental machine at every level have to be streamlined and become more responsive. Income tax evasion should be handled but should not become a “psychosis” by establishing complex legislation and inspection – if procedures do not remain as simple as possible they will scare off investment and eliminate the entrepreneurial spirit that resurrected this country after the Turkish invasion of 1974. Double tax treaties with more countries are a priority and should be dealt as such. Trade unions should adopt an open-minded policy. The pension fund has to be restructured. Building coefficients in selected areas have to increase. Hospitality and tourism have to be upgraded. International hotel chains should be targeted and “invited”. Architectural monstrosity should be eliminated. Architectural uniformity in all areas has to become a way of life. Tradition and heritage has to be protected and better projected. Creation and ingenious vision has to be cultivated. But above all and as a first step, populist like and bigoted demagogic methods embraced by most political parties and trade unions alike, making use of popular prejudices and promises in order to gain power (remain in power), preying people’s fears have to stop!

Hi Harris - and a Happy New Year,

I agree that much more has to be done to improve matters. By not taking decisive action the Government seems content on allowing others to destroy the very reasons people visit the island.

The island's tradition and heritage does need to be protected. Much of the rugged natural coastline that I remember from the 80s has been buried under concrete and turned into ghettos for foreign holidaymakers. Fortunately, many of the traditions live on in the villages away from the coast.

All of the public servants I have dealt with have been very helpful, but the procedures they use are in dire need of modernisation. I recently got a call from my architect - our Final Certificate of Completion was ready. I collected it, together with a couple of invoices, from the District Office. I then had to go to my Community Office to pay the two invoices. But before they would accept payment, the Mukhtar had to visit my house to make sure there was a pavement outside!

The following day I went to the Community Office, paid the invoices which were then returned to me duly signed. I then had to go back to the District Office with the two signed invoices - and was given a batch of papers that had to go to the District Surveyor at the Land Registry.

At the Land Registry I was advised that I needed some other documents, which I subsequently collected from my architect.

I then returned to the Land Registry (with my wife) with all the necessary paperwork and the clerk helped me complete a standard letter requesting the Land Registry to add our house to the Title Deed.

About a week later, two surveyors from the Land Registry arrived and surveyed the house. They said that everything was OK and that we could expect our Title Deed to be ready in a couple of months.

Why on earth are things so complicated and long-winded - is it really necessary? I think that whoever designed the system was intent on giving employment to as many people as possible.

Regards,

Nigel,

It is because no one trusts anyone. Hence all the signatures from officials. Not to mention the small fees you need to pay each time.

It is completely messed up from olden day times. We need a mojor shake up.

The government needs to employ specialist systems people to devise a workable system, not some half cock method by some peasant, and I am ashamed to say that, in some small office.

Roll on the good times.

Hi Pan,

I was a local councillor in the UK for several years and served on the Town Planning Committee. The process for issuing Title Deeds in the UK is very straightforward:

Once a Planning Application has been approved, details are sent to the Land Registry so that they can prepare Title Deeds. If land needs to be sub-divided, this is done by the builder's surveyor and included in the plans - the Land Registry does the rest. End of story.

If the Planning Application is submitted on behalf of a Councillor or a member of the local authority's staff, planning applications are decided in Committee to ensure there is no 'funny business'.

There is also an appeals system enabling people to object to Planning Applications. But there are very strict grounds on which appeals can be made and not all of them are successful.

Large developments, such a building a new runway at Heathrow airport, may result in a Public Enquiry and these can take many years to resolve in some cases.

The area where I used to live was open plan and we were not allowed to have walls at the front of our properties. Someone built one and the Council received a complaint. An officer went to see the person who built the wall and told him 'either you take it down or we will take it down for you'. The wall had gone within a week.

Regards,

Happy New Year Nigel,

Hope you enjoyed Xmas in sunny Cyprus as I did! What a wonderful weather we had when the rest of Europe was freezing to death…

As a Cypriot myself I am both angry and ashamed... The inefficiency of the government (and those governments before the present one) is inexcusable! I get however even angrier when it is so apparent that with somewhat minor changes and some sacrifices this island could become paradise!

The main problem: Lack of vision and sciolism... populism and demagogy, practiced devoutly by political and union leaders…

No doubt Cyprus has a lot to offer! Especially at times like these when every cent counts! Cyprus has the lowest corporate tax in Europe, it is a respected jurisdiction and although it took the different Cypriot governments ages to sign double tax treaties with corresponding countries, those that are already in place if managed and promoted efficiently would encourage even the most hesitant investor to invest in the island… But again, it is a matter of efficiency and excellence! And there is neither efficiency nor excellence when a government is characterized by mediocrity…

I have been observing the different debates by our politicians since the recent downgrade by S&P… And with a few exceptions, I was disgusted! Their populism approach was so obvious and provocative… their only concern was how to gain or not lose a vote… They finally took some decisions… enough only to temporarily blindfold the rating agencies and their European partners… But you cannot treat cancer by patching the wound, cancer has to be removed!!! And not only… Preventative and painful measures have to be undertaken not only for survival but to achieve excellence… And to achieve excellence one has to put the necessary stimuli in place to change mentality…

What you experienced Nigel in terms of your house is proof of the mismanagement that exists within the governmental and municipal machine… Everybody is talking about how to eliminating tax evasion by imposing more regulations (which at the end of the day will discourage investors) instead of simplifying procedures and finding ways of how tax revenues should be best managed…

I love this country and despite the above I remain optimistic… counting on the initiatives of certain entities within the private sector… believing that the market itself will eventually force and correct itself… This of course will take a lot longer with a lot more suffering… and it hurts…

I draw your attention to an article that I have recently written on the subject with the title “Cyprus – The economy calls for immediate action”, you may find it of interest: http://www.pytheas.net/docs/20101203-Cy ... action.pdf

Kind regards,

Thanks Harris, that article is very interesting. I think the island needs someone like Genghis Khan to sort things out. A Cypriot friend of mine said we needed Margaret Thatcher to sort out the unions - but perhaps that would be a step too far

Regards,

Wherever there is weak and indecisive management Nigel there is strong union... And instead of the barbaric and ruthless logic of Genghis Khan adopted by some nations and foremost a neighboring country of Cyprus and ethnic relative to him (Khan) that also claims to be European, I would prefer the logic of Aristotle accompanied by the vision of Byzas! Then common sense would make sense...

In regard to Margaret Thatcher, although not a fan, I can say one thing: She had guts! Her “feeling of helplessness, that we were once a great nation that has somehow fallen behind” is so appropriate for the Cyprus of today… It highlights a broad framework for the recovery of a country based not on dogma but on common sense which requires Aristotle’s simplistic logic and Byzas’ unsurpassed vision… to change mentalities that are outdated… cultivating a spirit of excellence and creativity…

Greetings,