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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 now the largest and most comprehensive professional firm of
Chartered Surveyors in Cyprus and the Eastern Mediterranean. The firm employs 75
members of staff across 8 offices in Cyprus, Romania, and Russia 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 10, January 2010
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Is the annus horribilis ending or beginning?
 One
should always look at any new beginning with optimism. It is difficult however
to be optimistic for 2010 after the ‘battering’ the economy and the real estate
market took in 2009.
The Cyprus Central Bank announced that property prices in Cyprus fell by an
average of 8% in 2009, compared to an increase of 13% in 2008. The Central Bank
has not revealed its methodology in reaching this figure, a percentage which we
believe grossly underestimates the situation across the island. Antonis Loizou &
Associates' views on price movement over the year are given in the table below.
| Residential plots (οικόπεδα) |
(-)10%-15% |
| Residential fields (χωράφια) |
(-) 15%-22% |
| Commercial plots |
(+) 5%-10% |
| Office |
(+) 10% |
| Shops |
(-) 20% secondary locations
(-) 25% tourist areas |
| Flats |
(-) 10%-15% primary locations
(-) 20% secondary locations
(-) 25% tourist areas
(-) 30% low quality |
| Fields (χωράφια) |
(-) 30%-40% |
2010 will be a year of pull and push factors for the Cyprus and indeed the
global economy. On the pull side unemployment is expected to rise to 7%
(currently at 6.2% - the highest in a decade), whilst households continue to be
burdened by a high percentage of debt, and are exposed to interest rate
volatility and Banks'/COOPs' practices on mortgage and consumer loans. On the
pull side, low interest rates, a lax monetary policy, a lack of investment
alternatives and a number of 'opportunities' in the market are pushing people
towards property acquisition.
Over the long term Cyprus needs to tackle problems which it has so long avoided.
The economy cannot sustain the large percentage of public workers (salaries,
perks and pensions) or operate in an environment bulging under the weight of
bureaucracy and corruption. Employees are grossly inefficient as most do not
keep up to date with developments in their respective field, have exaggerated
salary expectations, and tend to believe that they 'work for fun'. The later
point was best put by a taxi driver to one of our clients who stated that
"everybody in Cyprus is a millionaire, but they don't have cash as all their
money is in real estate".
When Warren Buffett was asked his views about the recession, he commented that
"when the tide goes out, you get to see who wasn't wearing swimming trunks".
Towel anyone? |
Cyprus Economy
• The Cyprus
Central Bank reported that 99% of Cyprus companies have been negatively affected
by the economic crisis. Key problems are their ability to collect debts from
customers, a decrease in demand, and difficulties in getting loans.
• Cyprus’ budget deficit for the first three quarters of 2009 was 2.0% of GDP
considerably below the forecasts at the start of the year calling for a budget
surplus.
• The Cyprus Central Bank expressed major concern about the economic conditions
of the country. It expects the economy to contract or stay flat, domestic
consumption to decrease, and unemployment to reach 7%.
• Economic analysts have predicted a 13% increase in the provision for bad debts
from the six major Greek and Cypriot banks. They also expresed concern about the
balance-sheet of banksm as well as the quality of their portfolios in countries
like Russia, Ukraine, and the Balkans where loan defaults are more common.
• The public’s expectations are particularly low, indicating that Cypriots
expect that worse is still to come. The Public Opinion Analysis sector of the
European Commission reports that 76% (54% in the EU) of the sample believe that
we haven’t see the tip of the iceberg, while 53% believe that 2010 will be worse
than the year before.
Cyprus Property Market
• The Cyprus
Central Bank announced that prices in Cyprus fell by an average of 8% across all
sectors in 2009, compared to a 13% increase in 2008. This follows the noticeable
reduction in the construction industry, and the worsening of the economic
conditions in Cyprus and the UK.
• Notwithstanding the status and analysis that the Central Bank has based its
average figure on, we would propose that the decrease in property prices is
considerably higher (see lead text).
• Over the year loans given to the property market (acquisition and
construction) have shown an increase of 9.7%, representing 21.6% of the total
loans given to Cyprus residents.
• Data from the Land Registry show that there is a rowing trend of capital
flight from foreigners. What is driving them away is their unwillingness, or
inability, to pay off their outstanding loans and prefer to “unload” the burden.
One should also bear in mind the existing matter of the lack of title deeds.
• The number property contracts of sale deposited at Land Registry offices
throughout Cyprus by non-Cypriots fell by 73% last year compared to 2008.
Famagusta was the worst hit area with sales falling by 81%, followed by Larnaca
with a fall of 80%, Paphos with 75% Limassol 62% and Nicosia 44%. When you
compare 2009 sales with those of 2007, the situation is even worse. Over the
last two years property sales to non-Cypriots have fallen by a colossal 84%.
Once again, Famagusta is the worst hit area with sales falling by a massive 90%,
followed by Paphos with a fall of 89%, Larnaca with 84%, Limassol with 70% and
Nicosia 55%. |
Global Property
Market
•
Investment in the Romanian property market was reduced by 22.5% compared to
2008, as a consequence of the lack of available funds and the conservative
approach of Banks to fund both purchasers and constructors.
• Shopping centers in Bucharest, which attracted investments of more than
€500m this year, saw a higher number of visitors in the first week of December
compared with the same month of 2008. However, retailers reported that sales
were 20% to 40% lower.
• Greece's budget deficit has risen to more than 12% of national output this
year, which is above the Eurozone’s limit of 3%. Despite the government’s
attempts to tackle the problem, all international ratings agencies downgraded
Greece - meaning that it thought the country was now a riskier place to
invest.
• Home prices in Greece decreased by 3.8% during the first three quarters of
2009, according to the Bank of Greece, all major cities follow the same
negative trend, with Thessaloniki leading the decrease with an annual average
rate of 6%, followed by Athens with 5.1% and other major cities with 3%.
• In the UK, the Royal Institution of Chartered Surveyors (RICS) indicated
that house prices are still being driven up by a relative shortage of
properties for sale. Separate government figures showed that UK house prices
rose by 2.3% in the three months to October, with prices rising fastest in
London and the south-east of England.
• In the third quarter of 2009 the Eurozone moved out of recession with
Germany leading the way. Inflation and interest rates continue to remain at
low levels, whereas the unemployment rate was reported at just below 10%, with
signs indicating towards a slow, yet steady, weathering of the economic
conditions.
• Spain reported unprecedentedly high levels of unemployment (19.3%), which
could dampen domestic demand and restrict economic activity. The German labor
market recorded an unemployment rate of 7.5%.
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Cost of Debt |
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GBP LIBOR |
EURIBOR |
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21/12/2009 |
One year ago |
21/11/2009 |
One year ago |
| 3 month |
0.60% |
2.98% |
0.71% |
3.08% |
| 6 month |
0.83% |
3.16% |
1.00% |
3.17% |
| 12 month |
1.24% |
3.25% |
1.24% |
3.26% |
| 2 year |
1.80% |
2.83% |
1.67% |
2.82% |
| 3 year |
2.42% |
3.07% |
2.06% |
2.99% |
| 5 year |
3.15% |
3.35% |
2.62% |
3.32% |
| 10 year |
3.90% |
3.65% |
3.42% |
3.82% |
| 15 year |
4.19% |
3.86% |
3.80% |
4.00% |
| 30 year |
4.08% |
3.51% |
3.78% |
3.65% |
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Articles
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Christmas Time - Always |
Antonis Loizou, FRICS 27/12/2009 |
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 During
these difficult times that we are experiencing and the non positive
prospects of the year 2010, for all of us, who deal in real estate, either
professionals / developers / investors / buyers and others, Christmas
appears to be a welcoming brake. It will give us time to relax, forget for a
short period of time our difficulties and hope for the best in the future.
Wining and dining, getting together with friends and family, is a way out of
this situation, but how long will this last? Nevertheless a short holiday
from this situation will give us all, time to consider our circumstances for
the future. We wish to submit a positive note and with special ...
Read Article |
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The
Greek Economy & the Cyprus Property Market |
Antonis Loizou, FRICS 20/12/2009 |
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 We
have noted that last week the international statistics of the Greek economy,
have been downgraded, causing a lot of concern to the Greek people, as well
as to the eurozone. The Greek economy has dropped from the one fast
developing economies in the eurozone, to the near bottom of the eurozone,
due to the global economic recession and bad management from the recent
local Government(s). It appears that in Greece there are no reliable
statistics and every Government prepares its own to suite voters and public
opinion. However the eurozone members do not trust Greece any more,
notwithstanding the fact that the new
...
Read Article |
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The Progression of Democracy - Titles |
Antonis Loizou, FRICS 12/12/2009 |
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 It
is very interesting to report on the way forward regarding the discussions
that are taking place now on the title deed issue. The Ministry of the
Interior has embarked in an unknown so far procedure in Cyprus, by preparing
4 draft proposals covering all aspects of the procedure (town planning laws,
building laws, Lands Office laws etc) in an effort to invite all sorts of
related associations, business chambers etc to offer their views/suggestions
how to improve the system. A site has been set up and everybody has the
chance to offer electronically (in addition) their views. In addition an
open dialogue is taking place between the political parties, so... Read Article |
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Title Deeds & Mortgages |
Antonis Loizou, FRICS 6/12/2009 |
 The
consultations between the various sectors of the profession (regarding the
problem of non issue of the title deeds), are proceeding, at a satisfactory
rate, both with the numerous associations as well as with the political
parties/Ministry of the Interior. In a recent meeting that took place at the
Ministry on the 26.11.09, numerous ideas were placed on the table, how to
speed up the process further and to his credit, the Minister of the Interior
(Mr Sylikiotis), who was presiding the meeting, adopted a number of the
suggestions made ...
Read Article |
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General Information on Housing |
Antonis Loizou, FRICS 29/11/2009 |
 From
time to time we get specific queries regarding property matters most of
which are answered directly and through the
Q+A column. In this article we will refer to some of the points which
are of a general appeal and which were not addressed before.
Read Article |
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Our News
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Μελέτη: Εξασφαλίσεις Δανείων & Υποθήκες |
5/10/2009 |
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 Σκοπός
της μελέτης είναι η καταγραφή των διαφόρων επιλογών που έχουν
σήμερα οι χρηματοδοτικοί οργανισμοί στην εξασφάλιση των δανείων τους και
στις επικρατούσες μεθόδους εκποίησης της ακίνητης υποθηκευμένης ιδιοκτησίας.
Περισσότερα
Κατεβάστε σε PDF |
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Reuters: Επέκταση στην Κύπρο με Αντώνη Λοΐζου |
12/12/2009 |
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 Το
γραφείο μας έχει διοριστεί αποκλειστικός σύμβουλος ακινήτων στην Κύπρο για
το πολυεθνικό ειδησεογραφικό πρακτορείο
Thomson Reuters. Σε συνεργασία με τον συμβουλευτικό οίκο ακινήτων
Cushman & Wakefield, στο εκ των μεγαλύτερων γραφείων παροχής συμβουλών
για ακίνητα στο τόπο μας έχει ανατεθεί το έργο της μεταστέγασης των
κεντρικών γραφείων της εταιρείας.
Περισσότερα |
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Governmental proposal on the title deed issue |
16/12/2009 |
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 Mr.
Αntonis Loizou participated in an open discussion regarding the Governmental
proposal on the title deed issue. Mr. Loizou who represented the
Cyprus Chamber of Commerce and Industry submitted practical measures on
how to speed up the process.
Read More |
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Σεμινάρια σε Ελεκτές / Λογιστές |
20/12/2009 |
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 Mr.
Το γραφείο μας παρέθεσε σειρά σεμιναρίων στους συνεταίρους των ελεγκτικών γραφείων KPMG, PWC, Deloitte κατά τη διάρκεια του μηνός Νοεμβρίου, 2009. Τα θέματα που συζητήθηκαν υπό μορφή ερωτήσεων / απαντήσεων ήταν κυρίως:
Περισσότερα |
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Ο κ. Αντώνης Λοΐζου ήταν φιλοξενούμενος του κ. Μαυρίδη στην εκπομπή του
ΡΙΚ-1 "Τηλεοικονομία" στις 18 Δεκεμβρίου 2009 σε μια συζήτηση για την
παρούσα κατάσταση στην Κυπριακή αγορά ακινήτων
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Ο κ. Αντώνης Λοΐζου ήταν φιλοξενούμενος του κ. Μαυρίδη στην εκπομπή του
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