The property market in Cyprus is still failing to attract foreign buyers with even price cuts of up to 30% being offered by some developers failing to result in sales to overseas customers.
The latest figures from the Department of Lands and Surveys show that 146 property contracts for foreign buyers were deposited last month compared with 160 a year ago. Foreign sales in February were down 9% on the same period in 2009.
Although property sales in Nicosia rose by 73%, it is unlikely that this was due to overseas investors as it is not an area favoured by expats or second home buyers.
Sales in Larnaca were down 29%, in Limassol they fell by 17%, and in Paphos, where some developers have been offering 30% discounts and other incentives, they were down by 41%.
The one place bucking the trend is Famagusta where sales rose 78% compared with a year ago, but this may be due to British expats who can no longer afford their mortgage repayments selling at a discount and individual investors who are picking up distressed property at rock bottom prices.
Keeping up with their mortgage repayments is a particular problem for those who took Swiss Franc mortgages with Cypriot banks, according to a report in the Cyprus Property News. Attracted by low interest rates, they been hit very badly by exchange rates. At the start of 2007 a Pound would buy 2.39 Swiss Francs but today it will buy you around 1.61 Swiss Francs.
Buyers who took out mortgages with banks in Cyprus have also seen base rate rises and in some cases having to pay almost twice as much than they budgeted for when they bought their property.
It is also widely thought that continued inaction to solve the island’s long running title deed saga has created negative feeling about the Cyprus property market.
The Interior Minister promised that new legislation to deal with the Title Deed problem would be ready by the end of 2008 but proposals have been heavily criticised and the problems is still unresolved.
A recent High Court ruling in London that at British couple must demolish their villa in the occupied area of Cyprus and give back the land to the original owner has confused many potential buyers and put them off buying property on the island.