Cyprus Property News: Issue 33 | February 2012

Email not displaying correctly? View it in your browser.

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 the largest and most comprehensive professional firm of Chartered Surveyors in Cyprus and the Eastern Mediterranean over the last 32 years. The firm employs 55 members of staff across 7 offices in Cyprus and Romania, 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

Subscribe to our newsletters | Forward-to-a-Friend

Issue 33,
March 2012

European Housing Review 2012 - RICS

European Housing Review 2012 - RICS RICS have published the European Housing Review 2012. The key messages coming out of this report are:

House price change was relatively moderate in general across Europe in 2011.
France, Iceland, Norway, Switzerland all experienced price rises of more than 5%.
Ireland and Spain saw the greatest house price falls.
In the UK, real house prices have fallen by a third since 2007;whereas France and Germany had far more modest declines of a tenth or less.
House building has fallen sharply across most of Europe since the onset of the financial crisis, the only exception being Switzerland. Only modest falls have been experienced in Germany and France.
A good Supply of mortgage credit is essential to sustained housing market recovery in Europe. However, mortgage availability was being cut back in most European countries towards the end of 2011. The Eurozone crisis and new banking regulatory requirements were compounding lender caution in face of weakening housing markets.

With regards to Cyprus, a noticeable change in 2011 was a considerable tightening of mortgage availability, resulting from financial turmoilas Cyprus's banks were drawn into the Greek sovereign debt crisis. Litle mortgage credit was available from the banks, especially in the second half of the year. This and the weak economy drew even the best residential areas into the housing price downswing. As the economic and financial situation is likely to get worse before getting better, prospects for 2012 are for continued housing market weakness and a further softening of prices.

Read further : Executive Summary Full Report

Cyprus Economy

• Euro area annual inflation was 2.6% in January 2012, down from 2.7% in December 2011. A year earlier the rate was 2.3%. Monthly inflation was -0.8% in January 2012. For Cyprus the annual inflation rate for January was at 3.10% , compared to a 4.20% in December 2011.

• The euro area (EA17) seasonally-adjusted unemployment rate was 10.7% in January 2012, compared with 10.6% in December 2011. It was 10.0% in January 2011. For Cyprus, seasonally - adjusted unemployment rate was at 9.3% for December, compared to 9.0%November 2011.

• The preliminary results of the 2011 census have been published by the Cyprus Statistics Department. According to the census, the population reached 838.897 persons on the 1st of October 2011 compared to 689.565 in the previous census in 2001, recording an increase of 21,7% in the last 10 years. The increased proportion of foreign citizens which reached 21,4% of the total population contributed to the overall population growth. The corresponding figure in 2001 was 9,4%. The number of housing units enumerated on the 1st of October 2011 was 432.736 compared to 293.985 in the 2001 census, i.e. recording an increase of 47,2% in the last 10 years. Out of a total of housing units, 69,0% are occupied and used as a usual place of residence. The remaining 31,0% are vacant/secondary dwellings.

• An influx of British and German holidaymakers helped boost the island's tourism sector in January by a 7% increase in arrivals compared to last year, according to the statistics department. Arrivals in January increases by 7.1%, from 44.442 to 47.610 for the same month in 2011. Sizeable increases from Britain 4.9%, Germany 47.9% and Greece 8.1% were also noted. Overall Cyprus has benefited from turmoil in other regional destinations such as Egypt and Tunisia. Income from Tourism accounts for nearly 12% of Cyprus's GDP.

Cyprus Property Market

• After an encouraging start to the year, sales tumbled in February.

It appears that the earlier surge in sales may be attributed to people waiting to deposit their sale contracts until after the recent tax reductions had been introduced. According to the monthly statistics published by the Department of Lands and Surveys, a total of 486 sale contracts were deposited at Land Registries across the Island in February compared with the 602 deposited during February 2011; a fall of 26.1%. Of those 445 contracts, 329 (82%) were Cypriot buyers and 116 (18%) were overseas buyers.

• A reduction of 14.5% was recorded in the number of building permitss, in 2011 compared to 2010. According to the Statistic Department "the number of building permits issued by the municipal authorities and the district administration offices during December 2011 stood at 560". The total value of these permits reached €189,3 million and the total area 213,9 thousand square metres. These building permits provide for the construction of 573 dwelling units. Building permits constitute a leading indicator of future activity in the construction sector.

• The Finance Ministry has prepared a proposal for licensing a number of high-quality casinos in Cyprus. According to the local press, each licence would cost €100 million and the target would be to secure €500 million by the end of the year to help fill the government’s treasury. The Finance Ministry’s proposal calls for an independent casino supervisory authority to be established and a strict legislative framework. Whether any projects will get the go-ahead in the foreseeable future is unclear as the subject has yet to be discussed in parliament and legislation will have to be drafted and agreed.

• HERMES Airports Ltd, the consortium in charge of operating and managing the island’s two airports, has confirmed reports that it is negotiating a sizeable investment involving the construction of exhibition showrooms and a logistical services centre at the old Larnaca airport building with an unnamed Chinese company. Airports’ spokesman Adamos Aspris said the consortium has signed a memorandum of understanding with the Chinese company, following months of “discreet talks”. The MoU would “pave the way for more substantive talks” between the two sides, with a view to achieving “one of the largest investments ever made in our country,” Aspris said. The Chinese company’s proposal involves the creation of a large commercial showroom for Chinese products and also a logistical services centre, he added. “The logistical centre will be based at the old Larnaca airport, and will constitute the bridge linking China to Europe, Africa to the Middle East,” he added. “In effect, Cyprus will become a gateway for Chinese products to Europe, the Middle East and Africa.”

Global Property Market & Economy

• The European Central Bank (ECB) left its key interest rate unchanged, at a record low of 1%, holding off on further measures to boost the shaky economy in the 17 countries that use the euro.Market concern over some debt-stricken European governments such as Spain and Italy has eased recently, and investors and analysts are waiting to see whether ECB president Mario Draghi gives a slightly more upbeat assessment of prospects for growth. The ECB is waiting to see whether its more than euro1 trillion in cheap, three-year loans to hundreds of banks handed out in December and again last week will result in more lending to businesses and consumers. The loans have helped steady wobbly banks and lowered borrowing costs for indebted governments like Italy and Spain.

• Pending home sales in the US are on an upward trend, which has been uneven but meaningful since reaching a cyclical low last April, and are well above a year ago, according to the National Association of Realtors. The Pending Home Sales Index,* a forward-looking indicator based on contract signings, rose 2.0 percent to 97.0 in January from a downwardly revised 95.1 in December and is 8.0 percent higher than January 2011 when it was 89.8. The data reflects contracts but not closings.The January index is the highest since April 2010 when it reached 111.3 as buyers were rushing to take advantage of the home buyer tax credit.

• According to the latest Halifax House Price Index, house prices in the three months to February were 1.1% lower than in the previous three months. On a monthly basis, house prices fell by 0.5% in February. This followed January's 0.6% increase and continues the mixed monthly pattern seen over the past year. Nationally, the average level of house prices is very little changed to last spring. The UK average price in February, at £160,118, was similar to that in April 2011 (£160,393).

REAL ESTATE CONTRACTS
	2010	2011	2012
Jan	570	522	803
Feb	704	602	486
Total	1,274	1,124	1,289

Foreigners
Jan	94	168	106
Feb	146	141	116
Total	240	309	222

Cost of Debt
	GBP LIBOR		EURIBOR
	15/3/2012	One year ago	15/3/2012	One year ago
3 month	1.04%	0.81%	0.88%	1.17%
6 month	1.36%	1.11%	1.19%	1.49%
12 month	1.87%	1.58%	1.53%	1.94%
2 year	1.23%	1.79%	1.07%	2.23%
3 year	1.31%	2.21%	1.17%	2.52%
5 year	1.56%	2.86%	1.52%	2.94%
10 year	2.36%	3.74%	2.25%	3.49%
15 year	2.79%	4.06%	2.57%	3.48%
30 year	3.09%	4.12%	2.53%	3.71%

English Articles of the Monthh

Useful Cyprus Statistics	26/2/2012
The Government has published its preliminary results on the population census which was completed in 12/2011. We provide for your information the following. Read Article

Private Website Sales	19/2/2012
Notwithstanding the fact that this article might be against our own interest as a registered/licensed estate agency, we provide for those people who want to use the website as a tool for sale on an individual basis, to take the following into account: ... Read Article

New Regulations – A Messy Approach	12/02/2012
The Ministry of Interior has introduced new regulations regarding the development of a single house in agricultural/non development areas. So far the prevailing practice was that a plot of land, provided it had an access from a passable road 4 mts. width, was allowed to build a house (there are parameters as well). Because within the countryside there was an unruly development and because of the problems that arose, the Ministry has decided to stop this practice. The new regulations stipulate that a town planning permit might be considered favourably if it is located outside the development area, provided that (the instructions are not confirmed it is Read Article

Help Yourselves	5/2/2012
We are aware of the numerous people trying to sell their property. Some of them have the time to wait and others (the majority) have not and they can even be termed as desperate sellers. The negative economic situation, but also the reduction in the value of euro vis-à-vis the sterling, is also serious, especially when considering that the potential sterling buyers will get “cheaper” properties, but then the sellers will get less sterling pounds. So if the euro goes down, the sale of property in Cyprus will improve, increasing the chances of sale, but for less money. ... Read Article

Greek Articles of the Month

Ο τελευταίος χρόνος των ευκαιριών;	26/2/2012
Μήπως είναι το έτος 2012 το τελευταίο έτος των ευκαιριών αγοράς ακινήτων; Υπάρχει η άποψη ότι επειδή οι πωλήσεις του μήνα Ιανουαρίου 2012 αυξήθηκαν κατά 54% (σε σχέση με τον 1/2011), υπάρχει ανάκαμψης και άρα είναι στο τέλος οι ευκαιρίες. Δεν συμμεριζόμαστε ιδιαίτερα αυτήν την άποψη, χωρίς ασφαλώς να αμφισβητούμε τις στατιστικές του Κτηματολογίου. Με την μείωση του Φ.Π.Α. στο 5% και των μεταβιβαστικών στο 50% ή ακόμη μηδέν, έγιναν διάφορα «πράγματα και θάματα» Συμφωνίες που έγιναν πριν (εντός του 2011) δεν κατατέθηκαν τότε, λόγω της συζήτησης του σχετικού νομοσχεδίου και ... Read Article

Κατοίκηση 3ης Ηλικίας	19/2/2012
Έχει από πολλά χρόνια καθιερωθεί στην Αμερική και μετά στην Ευρώπη, η ανέγερση συγκροτημάτων κατοικιών αφυπηρέτησης επί οργανωμένης βάσης, ενώ πρόσφατες αναπτύξεις στην Ισπανία δείχνουν τις τάσεις ενός νέου «concept», που ίσως να ενδιαφέρει τους Κύπριους επιχειρηματίες ανάπτυξης ακινήτων/επενδυτές. Όταν αναφέρεται κάποιος σε κατοικίες τρίτης ηλικίας, στο μυαλό κάθε Κύπριου έρχεται η άθλια εικόνα των πλείστων οίκων ευγηρίας, που μόνο ντροπή μπορεί να προκαλέσει. ΄Ανκαι υπάρχουν νέες μονάδες τέτοιου είδους με ψηλές προδιαγραφές, εντούτοις οι κατοικίες τρίτη ...Read Article

Μα είμαστε με τα Καλά μας;	12/2/2012
Σε προηγούμενο άρθρο μας αναφερθήκαμε για «Μυστικές Οδηγίες» που δόθηκαν από το Υπουργείο Εσωτερικών και που αφορούσαν την ανέγερση μεμονωμένης κατοικίας σε γεωργικές περιοχές - εκτός ορίου ανάπτυξης. Πέραν των υφιστάμενων παραμέτρων (ύπαρξη δρόμου - δικαιώματος διάβασης κλπ), τώρα για ανάπτυξη σε αγροτεμάχιο έχουν προστεθεί και νέα κριτήρια, τα οποία άπτονται και των προσωπικών συνθηκών του αιτητή. Σε πρόσφατη επιστολή του Υπουργείου μας ανακοινώθηκε ότι η μέχρι σήμερα επικρατούσα τακτική για ανάπτυξη της μεμονωμένης κατοικίας και παρ’ όλης της εφαρμογής της τακτικής αυτής τα τελευταία ±50 χρόνια, οι νέες οδηγίες απαγορεύουν πλέον την ... Read Article

Προς Υπουργό Οικονομικών

5/2/2012

Απευθυνόμεθα σε αυτήν την ανοικτή επιστολή προς τον Υπουργό Οικονομικών για να μελετήσει το θέμα των υφιστάμενων κριτηρίων για προσέλκυση ξένων επενδύσεων στην Κύπρο (με έκδοση διαβατηρίου) και την αγορά στέγης από ξένους με τη δυνατότητα μόνιμης παραμονής (εάν το επιθυμούν). Ο στόχος της εισήγησης μας είναι η ενδυνάμωση ενός μέτρου που ήδη υπάρχει, αλλά είναι ανεφάρμοστο στην πλήρη του επιτυχία και λόγω διαδικασιών και απαιτήσεων. Το μέτρο που εφαρμόστηκε το έτος 2007 με τα τότε οικονομικά δεδομένα (της ευφορίας) δεν μπορεί να έχει ικανοποιητικά αποτελέσματα σήμερα με την... Read Article

Our News

Joint Venture
A new website «Living, Buing Property and Doing Business in Cyprus» is launched www.cyprusinformation.com to provide general information about Cyprus, with more emphasis for Real Estate, Tax and Legal matters. The website which is part of a joint venture of Antonis Loizou & Associates – Chartered Surveyors, KMPG Cyprus and law firm A. Neocleous, is available in English and will be translated within two months in Russian, Chinese and Arabic.

Training Seminars
Antonis Loizou & Associates’ associate firm Leaf Research is organising two training seminars that would be of interest to property practitioners and the wider public.

Real estate valuations and the workings of the Cyprus property market
This seminar offers an introduction to the workings of the Cyprus property market, with a particular focus on valuation methodology in assessing property values for collateral purposes. Similar seminars have been run for Hellenic Bank and for the University of Cyprus (MBA course). Download
Renewable energy and development of medium to large scale projects
Renewable energy features highly in the investment spectrum of many investors. This seminar offers an insight into Cyprus’ renewable energy market and provides an introduction into the financial analysis of such projects Download.