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Hope for Big Real Estate Investment in Cyprus?
12 November 2017
The new Minister of the Interior has announced last week that he is introducing an “one stop shop” which will deal with large scale real estate investments (over €5.0 mil.). This office/shop will be managed by a project manager, whose responsibility is to keep a close watch and follow up the procedures regarding planning applications and issue of permits.
This need came about after numerous projects of a size seem to have extensive delays and difficulties with the existing procedures, whereas the frustration of large foreign investors who have been lured to invest in Cyprus is expressed with whole page adds exposing their dissatisfaction on the red tape and inefficiency of the system. An example in hand was the St. Raphael Marina, the Makenzy Hotel, the Yeroskipou project, the Limni project etc.
Will this new approach to real estate investment procedure have the expected results however? Permit us to have our doubts dear readers. This new shop/office will be managed by the same civil servants that are already dealing with the applications. It is a matter of attitude and efficiency and by changing one’s hut will not help matters.
In an interview we have had with the IMF who examined the Cyprus real estate market, we informed the committee that “the Government is trying to repaint an old car in hope that it will go faster”!! For this reason we suggest that the issue of the permits are to be undertaken by specialized licensed private firms, with Governmental Departments carrying out spot checks.
Examples of success in the matter is the privatization of land surveys which has reduced the delays in establishing the demarcation of a plot from one year to less than one month!! So yes it can be done but with safety procedures.
The Minister has set out time limits for reply for each application stage by the authorities. He has suggested that planning permits must be examined within 12 months reduced to 6 months as time passes. The environmental studies to be completed within 3 months etc etc. Needless to point out these time frames are already in force, but not kept at all. For this reason we suggest that if applications are delayed over the time limits, compensation should be sought from the Government and which should go down to the individual/civil servant(s) who has caused it.
In a country where the President of the Republic had to intervene in order for the applicant to get a response (see Yeroskipou project, the 1½ year delay for a reply for the Troodos venture park etc, we have our doubts). The Minister of Interior is well meaning, but unless drastic measures, including compensation, are introduced the situation will not improve.
Will our proposal happen your think dear readers? We much doubt it since the civil servants union and surprise-surprise even some private firms will object. As an example is that privatization of planning permits already exist for small projects but the architects do not apply this, since they either do not know how to go about it or prefer to play it safe through the Governmental Departments.
Let’s keep our fingers crossed and we will come back to you on the developments.