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.
Issue 11, February 2010
Greek public debt and the RICS Cyprus Property Price Index
the first quarter of 2010 is a sign of what lays ahead, then it’s going to be an
interesting and exciting year. Global finance markets appear to have stabilised
and there is even renewed confidence in the property sector, most notably in the
UK housing and commercial markets and even some early positive signs for Eastern
The ruling on the Orams case is likely to have an impact on the economy of the
occupied North of Cyprus and on the on-going negotiations for resolution of the
Whether Greece defaults on its government debt or not will have a considerable
impact on the already battered Cyprus economy. Greek companies and banks operate
in Cyprus, as do some of Cyprus’ leading banks in Greece. If Greece suffers,
Cyprus is not far from following suit, especially given its large and cumbersome
public sector which reduces its flexibility.
In the midst of the property market turbulence, the
RICS Cyprus has announced the creation of its property price and rent index.
Whilst its importance is likely to lay on bringing transparency to the opaque
property market and showing trends, its first findings indicate that Cyprus
residential real estate remains considerably overpriced in some areas.
What is of importance is that developers have realised that the market will not
return to where it once was. Property prices are being slashed, marketing
campaigns are being launched, and there is even some new development underway
with asking prices 20-40% lower than those during the peak. Lower prices are
easily justified when considering that land prices rose by 600% during the past
decade, and thus there was a hefty profit from land appreciation alone at the
peak of the boom. In time, individuals will also realise that prices are not
where they think/hope and the market will start correcting it self as they lower
their asking prices as well.
government announced that in 2009 public deficit rocketed to €1bn, or 6% of GDP.
Moreover, public debt is expected to reach 55,2% of GDP.
• The Government has raised €1bn by issuing 10 year bonds which will carry a
coupon of 4,683%. It aims to raise a total of €2.5bn by issuing long-term bonds
on international markets to finance public needs for 2010.
• Eurostat announced that unemployment in Cyprus reached 6,2% in November, up
from 6,1% in October and 3,7% in November 2008. Construction was hit the
hardest, followed by public administration, trade, hotels and restaurants, real
estate and business activities, manufacturing and newcomers to the labor market.
• With reference to the tourism industry, the first shots of a massive new
holiday price war were fired including up to 20% off some trips for next summer
to get more Britons abroad with Turkey set to become the most popular
destination for British tourists in 2010. The implications of the price war now
being waged in the UK for Cyprus is particularly significant, considering that
the UK supplies more than 50% of tourists to the island and generates just under
half of all foreign exchange revenue from tourism.
• Tourism arrivals for all of 2009 are set to register a 12% decline to 2.11 mln
from 2.4 mln arrivals in 2008. Tourism revenue, however, is set to register a
15% decline in 2009 to around EUR 1.5 bln from EUR 1.79 bln in 2008. In the
event that UK travel giants secure a 20% decline in prices from Cypriot
hoteliers to maintain bookings at 2009 levels, then overall tourism revenue will
record another 15% decline in 2010, forcing more hoteliers to close shop with
disastrous consequences for the Cyprus economy.
Cyprus Property Market
• The Court of
Appeal in England gave its ruling on Orams Vs Apostolides case. In short, the
Court decided in favour of Mr Apostolides, with the Orams ordered to demolish
the villa which they had constructed on his land in Lapithos, in the occupied
North, compensate Mr Apostolides for using unlawfully using his property, and
return the property to its legal owner.
Please see the decision of the Court of Appeal in England.
• The Land Registry announced that registered sales contracts fell by 44% in
2009, despite a noticeable increase in transactions during the last few months.
Total transactions numbered 8.170 compared to 14.667 in 2008, 21.255 in 2007,
and 16.953 and in 2006. Nicosia recorded a decrease of 31% on the year, with
Limassol, Famagusta, Pafos and Larnanca recording -38%, -58%, -52% and -49%
• Due to the decrease in the number of buyers from the UK and Russia, local
developers have started revising their marketing strategies. They are now focus
on markets such as Saudi Arabia and Iran, offer property discounts and
“investment packages” (guaranteed income, etc), and take part in more
international exhibitions. However, as long as the land values remain high, it
would be highly difficult to attract foreign investments.
first Cyprus property price index was launched by the RICS (Royal
Institution of Chartered Surveyors) Cyprus and the Association of Quantity
Surveyors. The index is based on methodology developed by the University of
Reading, UK, will be produced on a quarterly basis, and covers all types of
properties in the non-occupied part of the island.
consultancy firm CBRE, announced that more than €25.7bn of property
transactions were completed in the fourth quarter of 2009, an increase of 42%
on the previous quarter and double the level traded in the first two quarters
of the year.
• UK house prices continued to rise, with the price of an average home at
£200,000, higher by 0,6% compared to the same period last year. Whilst this is
considered as a sign for price stabilization, the small number of property
transactions makes any data and conclusion highly questionable.
• Property sales in China jumped 75.5% to $644bn last year, as record new
loans boosted buying. The sales data followed the announcement that December
property prices rose by 7.8%, the fastest pace in 18 months, adding urgency to
government efforts to rein in speculation.
• Property transactions in Greece were 50% lower in 2009 were than 2008, the
Bank of Greece announced. All property types were affected, with new homes
with an area of over 100sqm and holiday homes particularly hard hit.
• European economists believe that this year is going to be disastrous for
Greece’s economy. Despite the reforms of the public and private sectors pushed
forward, public debt is expected to rise from 113% to more than 120% of GDP
and budget deficit to circa 13% of GDP.
• The burden of Europe’s most difficult decision this year is likely to fall
on Angela Merkel, the German Chancellor, who will have to decide whether to
rescue Greece to forestall a crisis throughout the currency club. If Greece
defaults, other countries with high government debts, e.g. Portugal, Spain and
Italy, would face dramatically higher borrowing costs.
• Leading banks active in central and Eastern Europe expect the region to
start to recover from the economic crisis in 2010. UniCredit of Italy plans to
open 100 branches across central and Eastern Europe; Austria’s Raiffeisen
International is launching an internet-based banking service; and Erste, also
of Austria, is opening 70 branches in Romania.
• In November unemployment across Eurozone increased to more than 10%, the
higher level of the last 11 years. The highest unemployment rate was reported
in Latvia (22,3%) and Spain (19,4%), while the lowest in Holland(3,9%) and
Cost of Debt
||One year ago
||One year ago
A cause for celebration?
Antonis Loizou, FRICS 31/1/2010
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 ...
Our new ideas on property tax
Antonis Loizou, FRICS 24/1/2010
those who have appealed to us to come up with our own ideas on how to react
on the declared Governmental proposal on the property tax situation, we wish
to state that by the end of the month our own comprehensive proposals
regarding this matter will be submitted to the Government. Our proposals
bear in mind the urgency by the Government to collect €500 mil. within the
next 3 years (not only from real estate taxation) but at the same time to
take into account the negative affects of such a proposal, both for the
developers, property owners and the much needed new buyers/investors in real
3 Billion + Interest Rates
Antonis Loizou, FRICS 17/1/2010
is a blessing that we have had the existing Governor of the Central Bank,
prior to the global economic crisis, when he introduced, at the time he did,
strict lending measures. We, as an Οffice, amongst the total economic
community of Cyprus, had objected to his measures and we criticized him as
such, be, it most mildly. There was a period that the Governor was not very
popular with the existing Government, but following the prevailing
circumstances, the Government (we hope) has changed its mind.
Property tax Revised - What is this?
Antonis Loizou, FRICS 10/1/2010
Minister of Finance, in his search to find the much needed €500mil. in order
to get the Cyprus economy up and running, has announced various measures
which include cost saving measures regarding the civil service, reduction in
Governmental spending and a revised property tax which might amount to 15‰
[fifteen per thousand] for property owners in excess of €1.mil. Euros. He
also announced that the property tax will be revised and the so far basis of
1.1.80 market value will be replaced by updated values. These measures [he
said] will help collect over the next 3 years, the much needed €500 mil. for
the Cyprus economy.
Building Amnesty & Titles
Antonis Loizou, FRICS 3/1/2009
from the communications that we receive there appears to be a confusion on
the Building Amnesty/Title deed issue, we hereby re-write a similar article
in as a simple form as we can, in order to address the issue. The new
legislation proposes the issue, from now on, three types of titles:
In the News
Ξεκαθάρισμα της κατάστασης με τις τιμές των ακινήτων στην αγορά αναμένει πως θα
δώσει ο Δείκτης Τιμών Ακινήτων, ο Παύλος Λοΐζου. Ο Δείκτης παρουσιάστηκε στις 29
our Facebook page)
SIGMA - «Καλημέρα»
Ο Παύλος Λοΐζου εκπρόσωπος του RICS Κύπρου, φιλοξενήθηκε στην εκπομπή του SIGMA
«Καλημέρα» με την Μέλανη Στέλιου για τον Δείκτη Τιμών και Ενοικίων που
παρουσιάστε στις 29 Ιανουαρίου 2010.
our Facebook page)
ΡΙΚ-1 & ΜΕGA -
Κεντρικό Δελτίο Ειδήσεων (Δείκτης Τιμών και