Cyprus Property News: Issue 34 | April 2012 | Antonis Loizou & Associates

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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

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Issue 34,
April 2012

A case study of the trend of Household Debt Borrowers in Cyprus � The University of Cyprus

The University of Cyprus have published a case study concerning the trends of the Households Debt Borrowing in Cyprus.

The report covers a wide variety of subjects such as the amount of debt per household, the main reasons for borrowing, the house prices in Cyprus and etc.

The key messages coming out of this report are:

Mid-class income households in a relatively young age, have a high gross amount of debt vs income.
Elder Households with high income have high gross savings vs income.
House prices nowadays in Cyprus are reducing since late 2008`s.
How the foreign Investors have contributed to the Cyprus Economy.
What actions must be taken by the Cyprus Government in order to attract more Foreign Investors?
How Greece�s economic problems affect Cyprus.

Read further : Full Report

Cyprus Economy

� March rate of inflation reached the highest point in 2012 and the main reason was the rise in VAT to 17%. According to CyStat, inflation in March reached the point of 3.37% in relation to 3.09% in February 2012. The highest increase was observed in housing, water supply, electricity and gas sector at 14.15% from 13.27% in February.
� According to Cystat, the Cyprus unemployment rate in March 2012 faced a rise compared to that recorded in February 2012. Specifically, the unemployed people in March 2012 were 34.143 compared to 32.965 in February 2012. As Cystat stated, the most unemployed people have an age in the range of 30-39 years old and the sector having the most unemployed people is that of cleaners, messengers and unspecialised workers.
� Cypriot Banks have announced that they will reduce the interest rates and surcharges on late loan instalments in order to help the credit crisis on their customers. The Minister of Finance has asked the three CEO`s of the Cypriot banks to come together and find solutions in order to reduce the pressure on customers due to the exposure to Greece problems.

Cyprus Property Market

� Property sector is still in danger zone in March 2012 denying expectations for slow recovery stated in early 2012`s. One of the main reasons is the uncertainty in the property market together with the liquidity problems faced by the banks, which avoid lending. According to new figures released, for March 2012, sales recorded a drop of 10% to 563 from 625 in March 2011. In Nicosia, sales fell 13% to 501 from 575 last year, in Paphos sales rose 19% to 368 from 310 and in Famagusta they surged 18% to 156 from 132. In Limassol sales recorded an increase of 10% to 539 from 492.
� A reduction of 13% was recorded in the number of building permits, in January 2012 compared to January 2011. According to the Statistic Department "the number of building permits issued by the municipal authorities and the district administration offices during January 2012 stood at 555". The total value of these permits reached �125,4 million compared to � 157.8 million in January 2011. Furthermore the total area reflects to 127,1 thousands square metres in relation to 167.3 thousands square meters in January 2011. These building permits provide for the construction of 468 dwelling units. Building permits constitute a leading indicator of future activity in the construction sector.
� The government is waiting for the study on the total economic return to the Cyprus economy from the investment of Hermes Airports and Far Eastern Phoenix before taking its final decisions. The investment provides for the construction of 4 thousands showrooms of Chinese products at the old Larnaca airport and the decision for possibility of the extension of the contract to a period of 50 years. According to Mr Flourentzou, the Minister of Trade, the project will create new job posts, while a significant number of Chinese will be working in the warehouses and will live in Cyprus.

EURIBOR Averages	Jan 2012	Feb 2012	Mar 2012
1w	0.488%	0.372%	0.321%
2w	0.583%	0.437%	0.352%
3w	0.684%	0.523%	0.392%
1m	0.836%	0.626%	0.467%
2m	1.029%	0.833%	0.653%
3m	1.222%	1.048%	0.858%
4m	1.314%	1.146%	0.968%
5m	1.403%	1.240%	1.065%
6m	1.505%	1.345%	1.164%
7m	1.568%	1.412%	1.233%
8m	1.626%	1.472%	1.294%
9m	1.685%	1.529%	1.347%
10m	1.735%	1.576%	1.396%
11m	1.785%	1.625%	1.446%
12m	1.837%	1.678%	1.499%

Global Property Market & Economy

� The Euro Area annual Inflation rate was 2.7% in February 2012, unchanged compared with January 2012. The inflation rate in February 2011 was 2.4% while monthly inflation in February 2012 was 0.5%. The lowest annual interest rates were recorded in Sweden (1%), Greece (1.7%) and Spain (1.9%). The highest annual rates were recorded in Hungary (5.8%), Estonia and Poland (both 4.4%). The sectors and components with the highest annual rates were transport (4.6%), housing (4.4%), alcohol and tobacco (4.1%) while the lowest components were recreation and culture (0.9%) and education (1%).
� The demand for housing in the UK reached its highest level in the last 2 years as of the end of March first time buyers tried to beat the end of stamp duty holiday. New buyers� inquiries reached a 9% increase in demand for property. According to RICS, prices are continuing to edge downwards in all regions except London. The main factors that contribute to the change are that many people tried to reach the deadline of 24th of March which was the end of of the stamp duty-free period for first time buyers on properties worth less than �250.000.
� According to the latest Halifax House Price Index, house prices in the three months to March were 0.1% lower than in the previous three months. This was the same as the decline in prices on this measure of the underlying trend in December 2011 (-0.1%)

	Number of sales
	March 2012	February 2012	January 2012
Nicosia	171	148	182
Limassol	178	152	209
Larnaca	92	38	117
Famagusta	32	38	86
Pafos	90	69	209
TOTAL	563	445	803

	Number of Sales
	Foreigners	Locals	Total
2000	450	12214	12664
2001	1207	12849	14056
2002	2548	14111	16659
2003	3991	15294	19285
2004	5384	11947	17331
2005	6485	10106	16591
2006	8355	8598	16953
2007	11281	9964	21245
2008	6636	8031	14667
2009	1761	6409	8170
2010	2030	6568	8598
2011	1652	5366	7018
Q1 2012	351	1501	1852

Average prices by property type (England and Wales)	Feb 2012	Feb 2011	Diff.
Detached	�253,678	�257,861	-1.6%
Semi-detached	�152,720	�153,935	-0.8%
Terraced	�123,314	�123,927	-0.5%
Flat/maisonette	�151,942	�150,961	0.6%
All	�161,588	�162,541	-0.6%

English Articles of the Month

Narrow mindless in all its Glory?	25/3/2012
On the occasion of the Cypriots dams overflowing, we paid a visit to several of them to enjoy God�s Blessing and the most pleasant natural environment. We visited Yermasoyia dam (in Limassol) and we noted that there were several canoe-club members using the dam for exercise. As an ex-competition rower (Antonis Loizou) in the U.K. (Talk in Turn � Carlisle) we paid particular attention to this sport and had a chat with the participants, only to be informed that there is no facilities to lower the canoes from the car trailer to the dam, no parking, no w.cs. and even dangerous steps to go down. Read Article

One step forward - ten backwards	18/3/2012
This country will never cease to amaze us on the contradiction (antiphasis) of its actions. There are times that we feel quite pleased on political decisions and in other cases we wonder if, we, as Cypriots, have any brains!! After the initial disastrous period of the economic policy of this Government with a right wing �inister of Finance, he has been replaced by a hard core party (communist) minister Mr Kikis Kazamias. ... Read Article

Difficult Times & Change of Policy?	11/03/2012
It is notable that during these difficult times of the economy, the various political parties and public opinion seem to get together in facing the difficulties. Read Article

Resales & Procedures	4/3/2012
When one is contemplating to dispose his property, he must be prepared to undertake certain procedures in order to effect a sale. A straight forward sale is where there is a title deed for the property. The procedure is quite simple and the seller must: Read Article

Greek Articles of the Monthh

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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.