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We have real estate options
19 March 2017
For those brave people who want to invest in real estate with particular reference to houses, now is “their time” to get a good deal, as opposed to that of the previous years. Building land/plots prices are on a downward scale as are building costs and professional fees. Depending on location and district, building land has been reduced in prices by around 25%-35% (from their 2008 levels), whereas building costs are either stable (since 2009) or even showing signs of a reduction (by approximately 10%) but now (2017) they are stabilized. So should you wish to buy a plot and build your own home now is the time. Having said that and unless you want something particular, reflecting your own location, style and want, you must first examine the alternatives in terms of buying a ready home. Ready homes can be acquired from developers whose prices have dropped by around 30%-40% over the last years or choose a resale whose prices are around 40%-50% less than before (the banks assets for sale in addition). The choice is there with numerous properties for sale to accommodate all sorts of budgets and locations.
As an example a house at the Platy area (Nicosia) one of the most prestigious locations and having a house extent of 400 sq.mts., 25 years old, is up for sale for €620.000, in an area where the plot alone is worth more than €400.000. A beautiful house in an excellent condition, whereas the cost of rebuilding is more than €400.000 (be it new).
Building one’s home, one should budget from approximately €1.200 - €1.700/sq.m. depending on quality and external works plus of course the land cost, plus professional fees and overheads as well as the topography of the ground etc. As a very rough estimate in order to build your home based on average quality house, on a building plot of a level topography of around 500 sq.mts. (plot) and house 300 sq.mts., it should cost you approximately €2.000/sq.m. OR
Total cost ±€620.000
* depending on location
That amounts to around (300 sq.mts.) ±€2.070/sq.m. For a new building
If you now decide to buy a resale of say 3-4 years old, the price for the same house will not be more than €500.000 + transfer fees say €520.000 – a substantial difference of around €100.000 OR approximately ±15% less. Of course the resale may not reflect 100% your want, either in terms of design/quality/location/age, but if you are in particular after a holiday/retirement home, the difference is substantial and in addition you will get a ready and operational home, which, presumably the previous owner repaired everything, whereas a new house which you decide to build with its possible uncertainties and contractor’s claims and disputes, delays and bad workmanship are factors to be considered also in your balance sheet of thoughts.
Our own suggestion, is first to have an extensive market research on private (or financiers) resales, then move to developers’ completed projects and as a last resort to decide your own house/building. Buying a ready house, has the advantage that it is there, you can see what you are buying and you can easily check its structural condition and repair state, whereas a new home you might have latent defects of bad workmanship which might appear after delivery.
Discounts for completed houses and developers’ projects, are not uniform however. The discount depends on how desperate is the seller. The more he is, the more discount you will likely get. Your decision must not depend on the price level only however, but there are other parameters to consider. If the property has a title so registered that is good, but, if not it is not the end of the world. What you need to do is at what stage the route to the title is at and ascertain the reason for the hold up - If it is not serious then you might decide to go ahead.
Remember what we have written before in this column regarding our “10 Building Commandments” – i.e. points to consider when buying a home.
House hunting can be an enjoyment as well as a stressful experience. You need time and even if you do not have it (if you are say abroad), pay another person in the know to visit the properties and compare the alternatives. Seek the services of a reputable and licensed estate agent (numerous British, so called estate agents are unlicensed, so do not get carried away by the British name only assuming, that based on your own country’s experience being British is O.K.). Check if these agents have a license, check if they have a professional indemnity insurance etc etc, since the licensed ones are governed by the relevant laws and the unlicensed ones are just freelance cowboys out to get whatever they can without responsibility (a “license to kill” based on James Bond film!!).