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Company Profile
Antonis Loizou & Associates is a professional firm of Chartered Surveyors
offering valuation, agency and project management services. The firm was set up
in 1980 and is now the largest and most comprehensive professional firm of
Chartered Surveyors in Cyprus and the Eastern Mediterranean. The firm employs 75
members of staff across 8 offices in Cyprus, Romania, and Russia and is one of
the leading real estate advisors for corporations, finance houses, as well as
the local government and individual members of the public.
About us
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Issue 13 & 14, April & May 2010
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Qatar
aside, the future is bleak
 Cyprus
business headlines have recently been dominated by the agreement between Qatari
Diar and the Cypriot government to set up a joint venture for the development of
a leisure complex in Nicosia. This is seen as a vote of confidence for the
Cypriot economy, and has encouraged a number of investors and punters to express
their confidence in new projects.
The future of the Cyprus economy however remains bleak. Whilst we are confident
that things will get better – they can’t exactly get much worse – there are
tough choices to be made and changes to take place. There are a number of
changes taking place in the legal system with regards to the issuance of
property title deeds. This will hopefully be successful and lead to more
confidence in the Cyprus property market.
Issuing title deeds will be the second step towards the issuance of covered
bonds by banks in order to raise cheaper capital than deposits. In order for
this to happen three things need to take place – ease of change the mortgage
provider (already in law since 2009), title deeds (see above), and ease to
foreclose (the law has been under discussion of a while now). Can Cypriot
society handle the prospects of foreclosure? They must, if we are to make our
banks more competitive and streamline them with those abroad.
Difficult choices are also coming for the government sector. The criticism of
the European Central bank, the International Monetary Fund, and other
organisations is that any changes in state finances have to do with income
(tweaking the tax system) rather than controlling expenses. Who will take on the
mighty unions?
In recent days Europe has been convulsed by the fiscal woes gripping Greece. But
while Athens burns, there is an equally fascinating tale on the other side of
Europe which has got less attention: namely the fact that Ireland has not been
convulsed by political and fiscal disarray. The reason is social cohesion, and
that the government is able to impose tough choices on a society without
sparking political instability, social turmoil or worse.
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Cyprus Economy
• Portfolio
diversification seems to be irrelevant to Cypriot investors. According to
official data from the Cyprus stock exchange, the majority of investors (65%)
deal in only a single share. From 2-5 shares the percentage drops to 28%, from
6-10 to 5%, whereas for >10 it stands at 1%.
• According to the European Commission, Cypriot business and consumers expect a
worsening in the economic activity of the country. All sector indices remained
negative while the services and consumption indices recorded further drops, from
-8% to -17% and from -38% to -40% respectively.
• COOPs have seen their share of deposits grow compared to that of commercial
banks. Within a year, the 114 COOPs raised their share by 1.54% to 21.53%.
• The director of the Central Bank criticised the double financial regulatory
system that separates Banks from COOPs, which ‘in times of crisis, the lack of a
unified regulatory system can very well cause troubles’.
Cyprus Property Market
• The statistical
service announced a significant reduction in building permits and the number of
housing units under construction. The above applies to all cities except
Nicosia, which recorded a yearly increase of 9.8% in the area for which permits
have been granted.
• Sale contracts deposited with the Land Registry continued their upward trend
for a forth consecutive month. Contracts in the first quarter of 2010 were up by
21% compared to the same quarter last year. Yet, 2008 levels seem an untouchable
dream.
• Cypriot buyers dominate transaction volume, whilst many foreigners continue to
‘cash out’ of the market. 80% of all deposited sale contracts came from locals,
leaving the other 20% to foreigners. For the same period in 2008 the
segmentation was 58.8% for locals and 41.2% for foreigners.
• Qatari Diar Real Estate Investment Company and the Cypriot government agreed
to set up a joint venture for the development of a leisure complex in Nicosia.
The complex will total 50,000sqm and include a hotel, office and residential
complex. The Cyprus government is keen to attract more investment in other
sectors such as financial services, tourism and energy.
• The Cyprus government announced changes to laws designed to untie the ‘Gordian
Knot’ preventing the issue of some 130,000 Title Deeds to properties on the
island. The five draft bills designed to alleviate problems preventing the issue
of Title Deeds have been approved by the Council of Ministers and are now with
the House of Representatives. |
Global Property
Market
• Average
residential property prices in Dubai rose by 2% in the first quarter of 2010
compared to the same period last year, according to the latest house price
index to be published. Prices have now risen 4% since the last quarter of 2009
creating confidence that the downturn which resulted in price falls of 50% in
some locations is now at an end. It is also the first annual increases since
the emirate’s property market collapsed towards the end of 2008.
• Property prices are still falling in most of US amid concerns about rising
foreclosures. Property prices in the US continued to fall in the first three
months of 2010 although California is emerging to lead a possible recovery,
figures suggest. Several large metros in California show evidence of reaching
bottom but growing negative equity and record foreclosures will delay a
nationwide recovery.
• The Irish government will inject another €8.3bn into the nationalised Anglo
Irish Bank. The bank has incurred losses from its large-scale property lending
and needs substantial further capital. This constitutes the second bailout,
following the nationalisation of Anglo Irish Bank last year.
• The Irish government also owns respectively 25% and 16% stakes in Allied
Irish Bank and Bank of Ireland. A further €2.6bn will also be invested in the
Irish Nationwide Building Society, which struggled after it invested heavily
in commercial property before the financial crisis.
• The IMF has cut its 2010 growth projection for the German economy from 1.5%
to 1.2%, due to the weakness of the German banking sector and lower than
expected global trade. For 2011, IMF expects the German economy to expand by
1.7%, down from its previous forecast of 1.9%.
• In the UK, lending is expected to remain weak for the forthcoming years as
banks build up their capital base. Despite the £1.3trl support by the British
government to the Banks, lending figures (both to consumers and businesses)
continue to their lowest.
• According to the British Insolvency service, 19,077 businesses failed in the
country during 2009 – an increase of 22.8% since 2008, and the most since
1993.
• Greece’s four largest banks are seeking government support to help counter a
liquidity squeeze resulting from a significant flight of deposits. Given the
increased uncertainty, local savers (especially wealthy ones) transferred
about €10bn of deposits – equal to about 4.5% of the total in the banking
system – out of Greece in the first two months of the year.
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Cost of Debt |
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GBP LIBOR |
EURIBOR |
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10/5/2010 |
One year ago |
10/5/2010 |
One year ago |
| 3 month |
0.70% |
1.42% |
0.68% |
1.31% |
| 6 month |
0.96% |
1.62% |
0.98% |
1.51% |
| 12 month |
1.40% |
1.90% |
1.25% |
1.68% |
| 2 year |
1.67% |
2.16% |
1.33% |
1.75% |
| 3 year |
2.16% |
2.71% |
1.64% |
2.15% |
| 5 year |
2.90% |
3.36% |
2.27% |
2.81% |
| 10 year |
3.79% |
4.03% |
3.19% |
3.66% |
| 15 year |
4.11% |
4.31% |
3.56% |
4.02% |
| 30 year |
4.08% |
4.07% |
3.51% |
3.97% |
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Articles
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News on the Real Estate Sales? |
Antonis Loizou, FRICS 25/4/2010 |
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 Things
are improving but at a very slow pace. The recent U.K. international
exhibition showed that the British demand is still active, but it is
directed with regard to Cyprus for relatively low income purchases around
€150.000. The Russian market has not shown any signs of recovery in terms of
the million euros sales but it has been reduced to the €300.000-€500.000
mark. The resales is one of the problems which offer real opportunities and
with the Pafian developers offering 30% discounts (in effect we will add
more like 40%) is an example still competing with resales, whereas the lack
of titles is another major handicap in the recovery of ...
Read Article |
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Real Estate + Required Returns |
Antonis Loizou, FRICS 18/4/2010 |
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 In
Cyprus, real estate returns (yields) are very low by comparison to other
European countries and with a special regard to housing, the returns do not
exceed 3% (the income p.a. in relation to the property’s value). With
relation to commercial and industrial properties, the returns are higher,
around 4½ %-6½% p.a. These returns however were attractive during the boom
period, since in addition to the annual income (yield) we were experiencing
a healthy capital appreciation per year which ranged from 8%-12% p.a.,
increasing thus the total return on one’s investment. With the prevailing
circumstances however of depressed real estate...
Read Article |
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The Cyprus Economy + Communist Ideas? |
Antonis Loizou, FRICS 11/4/2010 |
 INotwithstanding
our support on many measures that this Cyprus Government has undertaken,
some of which we classed as “highly capitalist” and for which we take our
hat off, there is another side of the Cyprus Economy, which is managed by
this Government, which makes us worried.
The Golf and Marina projects, the Qatar approach for investment in Cyprus, the “cash for passports and permanent residency”, the way forward towards the title issue and many other efforts that the Government is undertaking, reflect more a capitalist Government, as opposed to a “communist” based one.
Read Article |
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Allowances for Capital Gains Tax |
Antonis Loizou, FRICS 4/4/2010 |
 Capital
gains tax is payable by both residents and non-residents at a rate of 20% on
the gains made from the disposal / sale of immovable property in Cyprus in
relation to the cost acquisition. If the property was acquired prior to
1.1.1980 the property’s value is adopted as at 1.1.1980 and this value is so
recorded on the title deed. If after 1.1.1980 the actual cost of acquisition
is adopted. In both cases the acquisition cost is upgraded/inflated, based
on the cost of living index, so published on a monthly basis by the Cyprus
Government. So, if a property is acquired at a cost of say €170.000 2 years
ago and the index is, say, now +7%, the indexed cost... Read Article |
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The Loch Ness Monster in Cyprus? |
Antonis Loizou, FRICS 28/3/2010 |
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 The
estate agents law is again under attack by the E. Union and a new proposal
has been prepared by the Government submitted for approval to the House. We
have reported in the Greek press as well as to the Government and the P.MS.
that this new legislation is a Monster in the Making. It is a Monster
because it differentiates between local and foreign estate agents by using
different criteria. Our basic objections are as follows:
Read Article |
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A cause for celebration? – Part B |
Antonis Loizou, FRICS 21/3/2010 |
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 The
recent decision by the European Human Rights Court has turned everything
upside down on the subject of real estate in the occupied areas. The Court
in its wisdom decided that if a property is held/developed by non registered
owners and because such a very long time has passed, the existing occupiers
have a first priority on the property. It added that the registered owner
could apply first to the Compensation Committee set up by the occupying
forces, who may decide to pay compensation or suggest an exchange between
the occupied property and Cypriot Turkish owned property in the
free/Republic area.
Read Article |
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Empty Development Land |
Antonis Loizou, FRICS 14/3/2010 |
 It
is well publicised that the Cyprus Government is promoting the development
of 14 (in total) golf courses making the island as a golf destination. This
forms part of a wider policy for upgrading of tourism, which was announced 7
years ago. This 10 year plan has a slow progress in implementing however and
the first result is the development of Limassol Marina and the 2 new
airports. Hopefully Larnaca and the Paphos marinas will follow soon, whereas
the Ayia Napa one which is now under negotiation will follow.
Read Article |
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Cyprus & Tax Incentives |
Antonis Loizou, FRICS 7/3/2010 |
 It
is a fact that Cyprus is using its low tax position and double taxation
agreements with other countries to attract wealthy foreigners to invest/buy
property and doing business here with, special provisions/attractions for
permanent residents. It appears however that what is a Permanent Resident
(which is the basis of the attraction) in Cyprus (or anywhere else) is not
easy to establish towards the U.K. tax authorities. Read Article |
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Our News
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Φορολογία Ακίνητης Ιδιοκτησίας -
Μια ολοκληρωμένη Πρόταση |
Μάρτης
2010 |
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 Η
πρόσφατη πρόταση του Υπουργείου Οικονομικών για διαφοροποίηση της φορολογίας
της ακίνητης ιδιοκτησίας, έχει αντιμετωπισθεί αρνητικά γενικά από την κοινή
γνώμη, τόσο λόγω του τρόπου με την οποία η πρόταση αυτή έχει υποβληθεί,
χωρίς την ύπαρξη λεπτομερειών, όσο και κατ’ επέκταση της αδυναμίας της
πρότασης να είναι συγκεκριμένη. Η πρόταση αυτή έρχεται ίσως στην δυσκολότερη
περίοδο της οικονομίας/βιομηχανίας ακινήτων. Ταυτόχρονα όμως, όλοι σχεδόν οι
επικριτές δεν προσφέρουν και εναλλακτικές λύσεις για τα κενά ταμεία του
Κράτους και για την καλυτέρευση της κατάστασης στην οικοδομική βιομηχανία.
Κατεβάστε PDF |
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Ζητούνται Εκτιμητές & Πωλητές ακινήτων |
16/3/2010 |
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Το Γραφείο μας (Λευκωσία - Λεμεσός) ζητά την πρόσληψη ατόμων στον τομέα της
εκτίμησης ακινήτων. Ιδανικό για νέους και μη στον τομέα, με όρεξη για
δουλειά που θα αποτελεί μέρος της μεγαλύτερης ομάδας εκτιμητών στην Κύπρο
και Μέση Ανατολή, σε Γραφείο 70 ατόμων.
Το Γραφείο Λευκωσίας ζητά προς άμεση πρόσληψη άτομο ηλικίας 25 - 45 ετών που
θα ενισχύσει την ομάδα πωλητών. Περισσότερα |
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