The debt for asset deals (swap deals)
are up and running and it seems that the financiers
will place in the market numerous
projects/properties (we understand that sales by the
financiers have reached last year over €200 mil. and
this year the expectation will be more).
You must be aware of the numerous large scale projects that
are under construction and others on the pipeline. These
projects including the marinas and golf developments, target
mainly foreign buyers who are after the permanent residency
visas and passports, which based on the Ministry of Interior
reports over the last 3 years approximately €1.7 bil.
housing and other units have been sold to this market
This is especially so for Limassol with multi storey
apartment buildings exceeding 30 floors and to a lesser
extent for the Chinese market (with their main activity
being Pafos). We have even enquiries from the British market
in its effort to secure a Cyprus / E.U. passport, bearing in
mind the Brexit, (be it very limited). This bonanza of
demand is evident in the press, with the announcement of new
projects, the recent one (again in Limassol) of another 3
tower blocks, whereas the Larnaca marina study based on the
foreign consultants who have carried a development study for
the purpose and whose feasibility is based on this market
demand (visas/passports). We understand also that the Ayia
Napa Marina is doing well in sales with mainly the Chinese
market-be it as yet without a building permit – but it is
coming-with sales prices of €7.000-€8.000/sq.m.).
We even have high rise apartment buildings under
construction and under consideration in Nicosia with sales
prices of around €3.500/sq.m. based on the same market
Having said that, we must express our worries however
Nicosia is not Limassol and even if sales prices in
Nicosia for the purpose is ½ of the beach towns, we
doubt if the foreign demand can absorb the supply (there
is a similar project in the centre of the town of very
good quality with only one apartment sold
notwithstanding its 3 years completion). How on earth
these daring Nicosia developers will succeed it is
beyond us (the financiers worries-danger apart).
We seem to forget that these buyers for passports have an
obligation to keep in their ownership the residential unit
for a period of only 3 years. So what will happen after the
3 years if, as we suspect, at least 50% will place their
units in the market at discounted prices, what will this
cause to existing and even other new coming projects and the
units ready at the time?
If this happens (we will suspect it will do) will we not
have another crash for such projects? Do the financiers have
this in mind?
An added worry is the recent letter (warning shot) given
by the E.U. that we, as Cyprus, are very liberal and the
signs of an objection by the E.U. is there. Yes other
countries do it (Spain, Portugal, Greece, USA, U.K.,
Canada etc) but then been small and weak (Cyprus) we are
more vulnerable (see the bail in – unique only for
We are also worried about the disappointment of foreign
investors who now placed whole page adds of their
complains regarding the long delays and inexcusable red
tape (most of the complains are justifiable).
The debt for asset deals (swap deals) are up and running
and it seems that the financiers will place in the
market numerous projects/properties (we understand that
sales by the financiers have reached last year over €200
mil. and this year the expectation will be more). The
legal pressure on sales will increase since financiers
cannot keep properties in their ownership for more than
3 years (we object to the limitation). So this is
another factor to consider to a possible flooding of the
market and including a “mini” crush, reducing market
The problem of non-payment of common expenses it is
there and nobody seems to care since this is something
which will come up more evidently in 1-2 years’ time.
See now with the non-payment of common expenses be it on
average €100 p.m. per unit, how are those high-end and
full of facilities projects are going to cope (we say
not less than €1.000 p.m./unit) with the high common
expenses bills? Will this not provide another pressure
group of the style we had before regarding titles and
with the analogous repercussion on the market (bad
publicity, discouragement of new buyers etc).
So here we are with approximately 200 new apartments
along the Limassol seaside road which is already
experiencing congestion/traffic problems how will this
(and other) roads and public services cope?
Yes, dear readers, it appears that all is well at this point
of time, but we must learn by our mistakes of the past and
which regrettable we seem to forget very easily.