Property sales keep falling in Cyprus despite price falls, figures show

Discussion in 'Cyprus Property' started by Nicholas Wallwork, Oct 26, 2010.

  1. Nigel Howarth

    Nigel Howarth Member

    Here's my chart derived from issue 10 (the latest) RICS Cyprus Property Price Index:

    [​IMG]

    and you can see in the following two charts how prices of residential apartments and houses have fallen over the past couple of years:

    [​IMG]

    [​IMG]

    Regards,

    Nigel
     
    Last edited: Jun 22, 2012
  2. Cornholio

    Cornholio New Member

    Update............

    Property prices still falling
    Published on August 3, 2012

    RESIDENTIAL property prices in the first quarter of 2012 continued their downward trend, albeit at a slower rate, according to figures released by the Central Bank.

    In a residential property price index for Q1 of 2012, the CB warned that prospects for a recovery in the sector are bleak due to limited liquidity and the uncertainty created by the fiscal consolidation measures under discussion between Cyprus and the troika.

    On a quarterly basis, property prices (both houses and apartments) in all districts showed a modest decline of 1 per cent compared to 1.8 per cent in the previous quarter with the exception of Paphos and Famagusta, where prices declined by 3.1 per cent and 2.4 per cent, respectively.

    Year-on-year property prices dropped 4.3 per cent.

    Property prices still falling - Cyprus Mail
     
  3. Cornholio

    Cornholio New Member

    Update............

    Nicosia home prices falling at ‘accelerating rate’
    By Poly Pantelides
    Published on August 4, 2012

    PROPERTY prices for buyers may be down but so are rents on apartments, warehouses and offices, the latest figures show.

    The latest index from the Royal Institute of Chartered Surveyors (RICS) shows “significant falls across Cyprus’ major urban areas, with prices and rents falling across all districts” in the second quarter of 2012.

    Over six months, the average rental price of a Nicosia two bedroom apartment went from €555 in March to €535 in June. In Limassol, rental prices for apartments went down from €502 to €479 in the same time period.

    In just three months, about €2,631 got shaved off the average buying price of a two bedroom apartment in Cyprus falling from €131,120 in March to €128,484 in June.

    Compared to the second quarter of 2011, prices dropped by 10.2 per cent for apartments, 6.4 per cent for houses, 10.8 per cent for retail, 9.0 per cent for offices, and 12.0 per cent for warehouses, according to the RICS Cyprus property price index.

    “[Prices] are going down. The country’s bankrupt and so are the banks. It’s as simple as that,” said member of RICS Pavlos Loizou who is in charge of the RICS Cyprus index.

    “Eighty-three per cent of Cypriots own their home so we don’t really have lots of people who want to buy… at this point you have almost 11 per cent unemployment which means that people who want to buy are putting it off,” he said.

    Most investors in Cyprus and abroad, such as property developers who would have an interest in buying a property, are “also sitting on the fence waiting to see how they play it out,” Loizou said.

    If the state of the economy and property prices were the only thing concerning investors then they might be buying, Loizou said.

    What is going on is that no one knows if and what changes there will be in taxes and legal requirements.

    Cyprus is due to borrow money from its EU partners and will be asked to restructure its economy and increase its income.

    Property developers cannot calculate what their income will be from renting out a property for the following year, since they might soon be asked to contribute a bigger proportion of their turnover, Loizou said.

    Or they might not. The point is that no one knows, “there are questions, e.g. are things playing out as they are in Greece?”

    So what next for the following year or two?

    “Paphos and Famagusta have seen their prices drop for years. Nicosia and Limassol started six months ago so prices for them are dropping at an accelerating rate,” Loizou said.

    Nicosia – relying more on the state and the banks – will suffer more in the following year, Loizou said.

    “But the fact prices are falling is a sign the market is rebalancing,” he said.

    “Between 2004 and 2008 when prices tripled we had just had a decade of stability and employment, banks gave loans out very easily. There was a state of euphoria, as if we were drunk,” Loizou said.

    Prices are adjusting to a long-term average, he said.

    Loizou said that when rent prices stop falling investors will know how much rent they will get from an investment and it will be a sign that offices are feeling robust enough to pay rents.

    But it will be a year and a half before that, he said.

    Of course when it comes down to specifics, sweeping generalisations are useless, another member of RICS said.

    “The index is a mirror of what is happening now,” she said.

    However, unless investors feel they can track their property’s future, they will postpone making choices.

    And prices will probably continue dropping.

    Nicosia home prices falling at
     
  4. jackson_home

    jackson_home New Member

    plannig to buy a flat in cyprus .But there are news that real estate market is not doing good there ?is this true ??
     
  5. Nigel Howarth

    Nigel Howarth Member

    Hi jackson home

    The property market in Cyprus is in a pretty poor shape. The government has introduced tax incentives last year in efforts to stimulate the market for new properties, but these have had little success.

    If you are looking to buy a property, restrict your search to resales with Title Deeds (this will avoid the pitfalls many others have fallen into) - and buy in an established area.

    Also, if you're looking to buy an apartment (or any other property with shared facilities) you need to find out what the communal fees are - and get a proper agreement.

    Lastly - and most importantly - get an independent lawyer to act on your behalf, check everything out, draw up a contract, etc., etc. The British High Commission publishes a list of English-speaking lawyers that you can find at http://ukincyprus.fco.gov.uk/resources/en/pdf/541790282/lawyers-south
     
  6. manshow

    manshow New Member

    I guess from 2010, things are not really going well in cyprus. But my belief is that since people are aware of it, they would be ready to sell it at lower costs. So would not it be a better choice to buy now? But yes, saying that, we can't deny the fact one has to be very careful in buying a plot in declining area as you do not know what low it'll go to.
     
  7. Nigel Howarth

    Nigel Howarth Member

    Hi manshow

    Local sales reached their peak in 2004, while overseas sales peaked three years later in 2007. Sales in 2009 were more than 35% down on the number sold in 2000 - and have continued their downward trend since then.

    The Royal Institute of Chartered Surveyors (RICS) publishes a quarterly property price index. The latest one, for Q2 2012, shows that prices of residential apartments are continuing to fall. House prices are also falling, but they may have bottomed out in Paphos and Paralimni/Famagusta where they have fallen 27% and 33% since the beginning of 2010. Anecdotal evidence suggests the prices of holiday homes have fallen by as much as 50% in some of the once-popular tourist locations.

    There are some bargains to be had, as many people are looking to sell up - but you need to be very careful.

    As I suggested in my reply to jackson home, If you are looking to buy a property, restrict your search to resales with Title Deeds (this will avoid the pitfalls many others have fallen into) - and buy in an established area.

    Regards,
     
  8. Veronica

    Veronica Administrator

    Make sure that the title deeds have actually been purchased by the vendor. I know of one case where the title deeds became available but the vendor did not purchase them. The developer owes the bank of Greece money and although the property in question was on a complex which was free of debt the bank seized the title deeds and have refused to release them so that the vendor can sell their home.
    So for anyone whose title deeds become available it is imperative that they are purchased immediately.
     
  9. Nigel Howarth

    Nigel Howarth Member

    I agree 110 percent.

    Just to clarify - Title Deeds cost a few cents, but there is a government tax 'Property Transfer Fees' that are Cyprus' equivalent of the Stamp Duty Land Tax (SDLT) that are payable in the UK when the ownership of a property changes hands.

    Property Transfer Fees are paid to the Land Registry and, once paid, the property is registered in the name of the purchaser and Title Deeds are issued bearing their name as the property's legal, registered owner.

    Until such time as the Property Transfer Fees are paid, buyers are not considered to be the owner of the property even though they may have paid for it in full.

    Failing to pay the Property Transfer Fees can give rise to 'difficulties'. As well as the problem that Pippin mentioned, buyers are unable to enjoy the full rights of property ownership, including the right to sell or dispose of it however they wish.

    Property Transfer Fees are based on the market value of the property at its date of purchase as assessed by the Land Registry - and there is an on-line calculator at Department of Lands and Surveys - Transfer Fees Calculator

    Regards,
     
  10. Veronica

    Veronica Administrator

    To get the true amount of transfer fee when a property is bought in two names the amount is based on each of the owners buying a property of half the value.

    So when using the calculator, assuming that a property is bought in two names, ie husband and wife, put in half of the total amount, then double the resulting total to get the full amount of the transer fee.
     
  11. Veronica

    Veronica Administrator

    This particular case has now been resolved thanks to the bank relenting and lifting the memo which had been placed on the deeds after a little bit of pressure from the buyers lawyer, the sellers lawyer and my husband as the agent for potential buyers. Our clients can now go ahead and buy the property secure in the knowledege that the title deeds will be issued in their names.
    The manager of the local branch of the bank was very helpful in getting this resolved and agrees that in cases like this a solution must always be found as it unfair to stop people being able to sell their properties.
    A little bit of team effort on everyones part has resulted in a happy ending for all.:proud:
     
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