One year anniversary! Just completed 12 monthly
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 12, March 2010
we have a problem’
2010 can be very well described as the most difficult year for Greece since the
aftermath of W.W. II. When looking the numbers, one wonders how, and if, Greece
has the capacity to rebound from this unprecedented crisis and return to normal
conditions. Greece's deficit is, at 12.7%, more than four times higher than
Eurozone rules allow. For years Greek spending has ballooned while tax revenue
has diminished. Its debt is about EUR 300bn. and the government estimates it
will need to borrow about EUR 53bn. this year to cover budget shortfalls. Debt
servicing is now costing Greece 11.6% of its gross domestic product and it has
to pay more interest on loans now because its credit rating has been downgraded.
If these were not enough, unemployment rate increased to 10.6% in November 2009.
The rate rose from 9.8% in October, and is also up from the 7.8% recorded a year
earlier. There are now nearly 532,000 unemployed people in the country. Under
the fear of contamination effects, EU appears willing to help Greece recover;
however this is not expected to happen in the near future, namely the
forthcoming 2-3 years.
to the director of the Central bank, despite Cyprus recording budget deficit
levels similar to most of the Eurozone, the fact that our European neighbours
were stroke harder, and earlier, by the economic crisis should be alarming.
• Primarily, the constant, and rapid, increase of government spending, and
secondarily the reduced income from the tourism and construction industries,
have shrunk the government’s finance and drawn a rather unfavourable economic
• With reference to the tourism industry, income reported a 4.9% decline to EUR
29,7mln for January compared to the same month last year. This is attributed to
the reduction by 2.4% in arrivals and by 2.6% in the per capita expenditure.
Further reduction was also reported both in the tourists’ daily expenditures and
the length of reside. Britons and Germans continue to prefer other destinations
than Cyprus as they have reported the largest month-on-month decrease with
-10.2% and -8.1% respectively.
• As far as the banking sector is concern, financial institutions are expecting
an extremely stiff 2010. Banks are caught between law credit growth rate,
limited liquidity, high insolvency ratio (expected to close at circa 7% in 2010)
and high interest rates.
• At the same time bank deposits are decreased for January 2010 by 0.1% compared
to the 3.8% increase in December 2009 and the 11.9% increase of the same period
• Consumption is also in a decreasing mode, according to JCC. Plastic money
transactions made by Cypriots, have decreased by 13% in January 2010. Housholds
pay high attention in fulfilling their primary needs with supermarket purchases
(26.67%), clothing (15,90%), other retail (12,68%) and fuel (11,28%) realizing
the bulk of the pie.
• All the above take place while unemployment for December is reported at the
historic high of 6.1%, compared to 4% in the same month last year. What is more,
Cyprus economy is officially under recession since GDP has declined in Q4 2009
by 0,3% compared to Q3 and 2,7% the same quarter last year. Q3 declined by 0.8%
compared to Q2. At the same time the majority of the eurozone countries have
exit recession reporting slow, yet positive, growth rates.
• Realizing the difficult times to come, Christofias administration has decided,
amongst others, to reduce the public sector’s operating expenses as a measure
for the betterness of public finance. Nevertheless, the public sector, per ce,
is not to bear any real burden as it is not expected to shrink nor to suffer any
salary cuts, what so ever, according to the Minister of Finance.
• The latest data from the Eurobarometer are staggering for Cyprus. Regarding
the global crisis, 43% of respondents said that the current economic situation
was their main concern, and that the worst was yet to come said 76%. This was
followed by 36% who said crime was their main concern, 31% said unemployment and
26% rising prices.
Cyprus Property Market
• According to
the latest figures of the Department of Land Registry, the total number of
contracts of sale deposited during January and December 2010 are increased by
24% and 26% respectively compared to the same months last year. The increasing
trend is reported in all cities except Limassol which in January has reported a
slight decrease of 1.0%. Ceteris paribus, the best case scenario for the
property industry is to fluctuate around 2009 levels.
• Foreigners, on the other hand, show little interest on investing in Cyprus
property market. A total of 94 contracts of sale were deposited throughout
Cyprus in January and 146 in February 2010, compared to 131 and 160 in 2009
respectively. This represents a drop of 28% and 9.6% respectively.
• In the wake of Cyprus’ remarkable real estate boom it is widely accepted that
property on the Island is overpriced. For some, this is attributed to the fact
that land is overpriced while for others, like the director of the central bank,
to the resilience of banks towards insolvent developers. When however, one
calculates the residential property yields, based on the RICS Cyprus Property
Index, would conclude that they are extremely low ranging from 1.5% to 3.9%; a
clear indication that property is overvalued.
• Antonis Loizou & Associates and Worldserve Business Services have conducted an
research concerning tax cycle in the purchase of a property. The conclusions
may be of great help to business men, policy makers and the wider public.
Unemployment in the Eurozone hit 10% (some 15.8mln people) in December for the
first time since the single currency was introduced, according to Eurostat.
Spain continues to lead the league, with unemployment rate reaching 19.5% in
December. The lowest rates, that is 4.0%, are reported in Holland and Austria
• The Greek government's decision to freeze public sector salaries and raise
the retirement age are among the austerity measures that have angered Greek
trade unions. Social unrest has turned from fear to reality with marches,
riots and strikes taking place country-wide.
• Greece's debt crisis has put pressure on the euro, and despite the fact that
EU rules prevent the Eurozone from collectively bailing out Greece, the
current conditions have forced EU leaders to seek ways to help nevertheless.
• However, markets remain sceptical that Greece will be able to pay its debts.
Analysts say that powerful Eurozone members such as Germany and France may be
able to help by buying Greek government debt or by providing loan guarantees.
It remains implicit, nonetheless, how leaders would convince tax payers that
their money are not spend on rescuing Greece, than for their own welfare.
• In the Uk, the number of people filing for insolvency hit a record level in
the last three months of 2009, pushing up the 2009 figure to a historic high.
A record 134,142 people became insolvent over the course of the year, which
beats the previous record of 107,288 in 2006.
• Contrarily, housing market has opened the year with an increase in prices
(0,6%). January is the seventh consecutive month that reports increases,
according to the Halifax price index. The positive upturn stems from the
increased demand and the limited stock out in the market.
• In Central London, office market investment turnover increased to GBP
2,5bln. As a result of a number of significant transactions in Docklands.
However, purchasing activity remains relatively low across the city and West
End markets due to a continued lack of availability which put pressure to the
prime yields. Speculative construction activity fell by 40% year-on-year.
• As for commercial property, prices increased by 3% according to Earnst&Young,
the highest monthly increase in 23 years. This fact should be faced with
caution, as its sustainability is highly unlike, hence any assumptions should
• According to PwC, London is the best place in Europe to invest. The rapid
fall of property prices combined with the relatively weak sterling has placed
London in the top place, once held by Munich.
• The Russian economy shrank by 7.9% in 2009 compared to 2008, the biggest
annual fall in 15 years, the Federal Statistics Service has announced. The
decline sharply affected energy prices, construction, manufacturing,
restaurants and hotels.
Cost of Debt
||One year ago
||One year ago
The €20.000.000 property deal
Antonis Loizou, FRICS 24/1/2010
said that Cyprus is particularly hard hit on real estate? A recent
acquisition of a central commercial plot at Nicosia, off Makarios avenue,
having an extent of approximately 2.000 sq.mts., was sold for a price/cost
in excess of €10.000/sq.mt. The buyers, a French based firm, has imaginative
plans how to develop this most attractive property. This unpredicted high
price which took us by surprise especially during recession times, has
proved what we have said all along, that is, it is primarily the touristic
housing market and secondly the residential housing areas that have been
affected and not commercial sites/properties.
Getting a Residence Permit - Cyprus Passport
Antonis Loizou, FRICS 21/2/2010
is some confusion on the new measures that the Government has decided for
foreign people (non - E.U. members) to get a residence permit and even a
Cypriot (E.U.) nationality through the use of real estate. Residents of
third countries (i.e. countries which are non E.U. members, such as
Russians, Ukrainians, Iranians etc) who have shown interest in acquiring
property in Cyprus have now an added bonus.
Empty Development Land
Antonis Loizou, FRICS 14/2/2010
may have noticed how much empty building land is around. Vacant building
plots must still be lit, roads cleaned and maintained etc and all these for
a little cost (for an ordinary vacant building site the cost is
approximately €60 p.a.) not enough even for the cost of having the road
electricity. In a recent study prepared by the Ministry of the Interior, it
concluded that there is already enough vacant development land (i.e. land
which has already been zoned for residential/other development) to
accommodate 4 mil. people. So, bearing in mind the 700.000 population, it
seems that Cyprus has a supply of land which exceeds demand by...
Are the Russians Coming?
Antonis Loizou, FRICS 7/2/2010
situation on the
Cyprus Real Estate is well known and with special reference to
the British demand, which is the main holiday home market for Cyprus, it can
only be described as being tragic (not only for Cyprus, but a Europeanwise
situation). The second main holiday home buyers for Cyprus real estate is
the Russian market, which up to prior to the crisis, had a budget of around
€1.0-€2.0 mil., and interest was directed mainly for holiday homes, either
on the beach or with a sea view and demand was directed mainly for
individual villas and beach ... Read Article
Μελέτη: Φορολογία και Ιδιόκτητη Κατοικία
Αυτή η μελέτη εξετάζει τον ‘φορολογικό κύκλο’ από το κόστος αγοράς ενός οικοπέδου και την κατασκευή μιας μέσης ποιότητας και μεγέθους κατοικίας, ως και την πώληση της. Η μελέτη έχει ετοιμαστεί από την Αντώνης Λοΐζου & Συνεργάτες και την Worldserve
Κατεβάστε σε PDF
Ζητούνται Εκτιμητές & Πωλητές ακινήτων
Το Γραφείο μας (Λευκωσία - Λεμεσός) ζητά την πρόσληψη ατόμων στον τομέα της
εκτίμησης ακινήτων. Ιδανικό για νέους και μη στον τομέα, με όρεξη για
δουλειά που θα αποτελεί μέρος της μεγαλύτερης ομάδας εκτιμητών στην Κύπρο
και Μέση Ανατολή, σε Γραφείο 70 ατόμων.
Το Γραφείο Λευκωσίας ζητά προς άμεση πρόσληψη άτομο ηλικίας 25 - 45 ετών που
θα ενισχύσει την ομάδα πωλητών. Περισσότερα
In the News
ΡΙΚ-1 - "Τηλεοικονομία"
Ο Παύλος Λοΐζου ήταν φιλοξενούμενος του κ. Μαυρίδη στην εκπομπή του
ΡΙΚ-1 "Τηλεοικονομία" στις 4 Φεβρουαρίου 2010 σε μια συζήτηση για την
Δείκτη τιμών και ενοικίων του RICS Κύπρου,
που παρουσιάστηκε στις 29 Ιανουαρίου.
our Facebook page)
SIGMA - «Πρωτοσέλιδο»
Ο Παύλος Λοΐζου με τον Νικολα Κυπραίο (Worldserve
Business Services), φιλοξενήθηκαν στην εκπομπή του SIGMA
«Πρωτοσέλιδο» με τον
δημοσιογράφο Παναγιώτη Δημόπουλο για την μελετη
'Φορολογία και ιδιόκτητη κατοικία' που δημοσίευσαν από κοινού
στις 7 Μαρτίου 2010.
our Facebook page)
ΡΙΚ: Πρώτο Πρόγραμμα- «Εμείς και ο
Ο κ. Αντώνης Λοΐζου, φιλοξενήθηκε στην
του Πρώτου Προγράμματος του ΡΙΚ «Εμείς και ο
κόσμος μας» με την
Φοίβια Σάββα στις5 Φεβρουαρίου 2010. Ακούστε
Peter Christofi, marketing manager, said "This exhibition was far different from
our past exhibitions attended, although, we recorded more activity in previous
years, it was evident that the Russian public have progressed in knowledge of
buying abroad and the attendees, knew exactly what they wanted before coming to
the show. Therefore the quality of the leads are far greater".