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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 15 - 18,
June / Sept. 2010
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Property
market bottoming out: Are we there yet?
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 Take
a stroll around central London, Bucharest, Athens, Dublin, or Limassol and you
will be forgiven to think that the recession never happened. Europe’s cities are
bustling with life as economic growth begins to recover and some activity stirs
up the barren business landscape of the past couple of years. This however is
nothing but a “false start”, or rather fallacies of
numbers, as even miniscule levels of activity appear significant in percentage
terms.
Property buyers are divided into three groups – “I need to
buy”, “I would like to buy”, and
“it’s profitable to buy”. The first group are
people looking for a home or somewhere to house their business. The second group
are looking to upgrade their home or business premises, or looking for a holiday
home. The third group is “hot money” that moves
opportunistically between markets in search of returns.
The first group is struggling to come back into the market as property prices
remain out of kilter compared to average income (they are 8 times compared to
4.5 times in the UK) and debt financing has decreased dramatically as banks and
coops have increased their conditions for lending. The second group is not
really back in force, although some have “picked up”
properties from struggling owners hard hit by the recession, and the third group
is still licking its wounds from its investments in tertiary locations and
Eastern Europe.
There is another problem that is yet to really surface. For many Cypriots
property, and land in particular, has traditionally been a way of
“saving” – almost an alternative to banking. Now
that times are hard, they find themselves in need of cash but their
“land savings” are not
accessible as no one is willing to buy from them (or not at the prices they
want).
What then lies ahead? Property prices need to adjust to more affordable levels
so that the market starts moving again. We also need to think about how to
increase the efficiency of our society, and other ways to plan and save for the
future. Until then we will continue to be in limbo, to be awaken at regular
intervals by the fallacies of numbers.
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Cyprus Economy
• The
International Monetary Fund (IMF) Executive Board has welcomed signs that the
Cypriot economy is beginning to bottom out in 2010, leading to a modest recovery
in 2011. According to the IMF assessment, concluded on August 27, the near-term
outlook is still fragile as global financial risks remain elevated and growth
prospects in trading partners muted, while a positive inflation differential
with the euro area has reopened.
• Eurostat announced that the annual inflation in the Euro area for August is
down to 1.6% , while for Cyprus it has increased from 2.7% in July to 3.4% in
August 2010.
• Eurostat announced that the unemployment rate in Cyprus for July 2010 fell to
7.1% from 7.2% in June 2010. The unemployment rate in the same month in 2009 was
5%.
• The Cyprus Government announced its Budget for 2011 which envisions a
reduction in the deficit to 5.4%. The Minister of Finance said the 2011 budget
goes a “long way” towards fulfilling Cyprus’
commitment to the European Union to slash its deficit to at least 4.5% next year
and to under 3% by 2012.
• An increase in taxation of Cypriot companies and banks as well as hikes on
tobacco and alcohol, could be included in a package of measures to plug a €150
million hole to keep the budget deficit for 2011 within the limits set by the
European Union.
• CONTI Mortgage Overseas, the UK's leading overseas mortgage specialist,
announced that Britons are turning once more to more traditional markets for
holiday homes. An estimated 43% of enquiries are for France, an estimated 24%
for Spain and an estimated 18% for Turkey. Cyprus, along with Australia, New
Zealand and Ireland receive a mere 0.5% mortgage enquiries.
From the Top 10 list Greece, Bulgaria and the UAE are missing as they are
considered to be risky due to their economies.
• The procedure to select a long-term natural gas supplier is now in its
‘final stages’. The Natural Gas Public Company (DEFA)
In a statement said it was continuing its ‘intensive
negotiations’ with the interested suppliers.
DEFA is currently conducting the last round of discussions with three
short-listed companies. The supply agreement will be for 20 years. The
government has opted for Liquefied Natural Gas (LNG), which will be processed at
a re-gasification facility, estimated to cost some €800 million. Construction on
the facility has yet to begin, but officials have repeatedly stated it should be
ready by 2014.
Cyprus Property Market
• Legislation designed to tackle the problem of unlicensed constructions across
the island, as well as spelling out who is responsible for what in real estate
transactions, could be ready by next month and may at long last bring relief to
thousands of ‘trapped’ property buyers. The Bill is
to be presented to the Parliament on 15th October.
• The matter of fully or partially abolishing the transfer fees payable
for the purchase of property, liable for VAT, under certain circumstances is
being examined be the Cyprus Government. If implemented the measure will be in
effect for a period of 2 years in coastal areas and not the city centers of
Limassol and Nicosia. A proposal seen by some as unfair and unconstitutional.
• The Land Registry and the Banks have reached an agreement and the much
anticipated Leasing Legislation will soon be present.
• House prices in Cyprus fell at a slower pace in the second quarter of
2010, with locals starting to make a reappearance on the property market, data
from the RICS Cyprus property index showed. “Towards the end of the second
quarter there were some early signs of stabilisation, with local buyers returning to the market taking advantage of lower prices for holiday homes,”
said RICS in its third-ever index.
• President Demetris Christofias on 7th September laid the foundation stone for
the Limassol marina, a €350 million project that will change the coastal city’s
landscape and enrich the island’s tourist product.
• Shacolas Group has announced the development of a new Golf Resort. The aim of
Cyprus Limni Resorts and Golf Courses Plc is the creation of a complete complex,
which will accommodate two signature golf courses, each having its own club, a
luxury 5 star hotel of a recognizable brand, health centre, spa, villas,
detached houses etc. The proposed site has an area of 3,151,000 m², in the Limni
area of Polys Chrysochou, Paphos.
• A forum of Japanese and Cypriot investors intends to erect the tallest
building of Cyprus in the centre of Nicosia, which will be 40 storey’s high. The
holding company, Nartia Holdings has possession of a prime property on
Themistocle Dervi, Nicosia, and has given the proposed project the name ‘Nicosia
Landmark’.
• The Alakati Village development in Lakatamia has finally obtained planning
permission. It is now a matter of time for the works to begin, which at the
first stage will include a retail and business area of circa 25,000 m² as well
as 100 villas and 400 apartment of 175,000m². Additionally at a second stage the
construction of a seven storey 4 star Boutique hotel, accommodating 80 bedrooms,
which will also incorporate cafeterias, retails spaces and service apartments. |
Global Property
Market
• The
average price of prime property in the UK fell by 0.3 per cent in August,
further evidence that the strong recovery in the prime property markets has
stalled. Growth in prime property prices has slowed due to an increase in
properties coming onto the market and demand declining from top-end buyers.
• According to the British Insolvency service, the number of individuals being
declared insolvent hit a record high in the first quarter of this year at
35,682. The number of firms going into insolvency fell again in England and
Wales, down 2% from the previous quarter to 1,311. These corporate
insolvencies - accounted for by receiverships, administrations and company
voluntary arrangements - were 14% lower than in the same quarter of 2009.
• The UK housing market recovery has slowed down. According to the UK Land
Registry, house prices in July rose by an average of 0.4 per cent – the
fastest monthly rise since January 2010 – but the year on year growth rate
fell to 6.7 per cent from a peak of 8.7 per cent in May of this year.
• Interest rates on UK government debt saw their sharpest fall in 18 months
after the decision by the Federal Reserve in Washington to open the door to a
new round of stimulus measures to boost the US economy.
• The US housing market continued to sputter in August, as new home sales were
flat and prices fell in a troubling sign for the economy. Economists were
expecting that sales would pick up after sliding in July and compared with
sales a year ago are off by nearly 30 per cent.
• Norway’s central bank has sued Citigroup for alleged misstatements over the
company’s financial condition before the financial crisis, which it claims
caused heavy losses to the Norwegian sovereign wealth fund. In a lawsuit filed
in New York, Norges Bank alleged that it lost $835m because Citigroup failed
to fully reveal the financial risks it was facing – particularly from
investments in subprime mortgages.
• The Irish Republic's economy shrank by 1.2% in the second quarter of this
year, surprising analysts who had expected it to grow.
• German GDP grew at 2.2% in the second quarter of the year. Meanwhile, German
business confidence hit a two-year high this month, while French growth was
revised up. In France, the national statistics institute revised
second-quarter growth up to 0.7%, from 0.6% previously. further evidence of a
growing economic divergence within the eurozone between the core countries -
France and Germany - and those worst affected by the debt crisis.
• The price of gold reached $1,300 an ounce for the first time. The price of
Gold reached $1,300.07 during trading at the London bullion market, before
dipping back. The latest rise has been spurred by caution over the global
economy, as well as weakness in the US dollar - the currency used to value
gold - which fell 1% against the euro. The gold price has increased five-fold
in the last 10 years, up from a low of $258 in 2000.
• The Irish Republic has raised 1.5bn Euros ($1.96bn; £1.26bn) through an
auction of government bonds. The sale of four and eight-year bonds has been
seen as a crucial test of investor confidence in the country's economy. The
four-year bonds will pay a yield of 4.77%, while the eight-year bonds will pay
6.02%.
• Greece has successfully sold government bonds in its first attempt since the
huge EU-IMF loan bail-out was launched in early May. It had sought to raise
1.25bn euros (£1.05bn; $1.58bn), but the offer was oversubscribed, with bids
totalling 3.6bn euros. Greece must repay the bonds after six months, with a
return rate of 4.65%, which is lower than IMF loans.
• Qatar has signed a memorandum with Greece expressing interest in investing
as much as $5 billion in areas of the Greek economy. The countries will focus
on investments in real estate, tourism, transport, port or airport facilities,
banking and finance, joint ventures, energy and other industries, when and as
agreed by the two states, according to the memorandum.
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Cost of Debt |
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GBP LIBOR |
EURIBOR |
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27/9/2010 |
One year ago |
27/9/2010 |
One year ago |
| 3 month |
0.73% |
0.55% |
0.88% |
0.74% |
| 6 month |
1.03% |
0.74% |
1.14% |
1.02% |
| 12 month |
1.47% |
1.09% |
1.42% |
1.24% |
| 2 year |
1.27% |
1.81% |
1.38% |
1.65% |
| 3 year |
1.55% |
2.52% |
1.56% |
2.10% |
| 5 year |
2.10% |
3.28% |
1.94% |
2.71% |
| 10 year |
3.07% |
3.91% |
2.60% |
3.47% |
| 15 year |
3.48% |
4.16% |
3.56% |
3.85% |
| 30 year |
3.68% |
4.06% |
3.51% |
3.95% |
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Articles
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The Protaras / Famagusta Region - Suitable for Permanent living? |
Antonis Loizou, FRICS 29/8/2010 |
 Another
summer is coming to an end, and Protaras/Famagusta region is one of the most
favorite summer resorts in terms of holiday and holiday homes. This is quite
rightly so, since it has the most attractive sandy beaches of Cyprus, an
easy access (1 hour) from Nicosia, all the way motorway and the most calm
and clean sea. We will say that approximately 70% of those who buy
holiday/summer homes from Nicosia, choose the Famagusta region and with the
recession, prices appear to be more affordable than ever.
Read Article |
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Summer
Holidays + Homes in Cyprus |
Antonis Loizou, FRICS 15/8/2010 |
 Notwithstanding
the fact that Cyprus has a constant sunshine, the summer holidays is more of
a festive occasion than anything else. The beach and bathing apart, the
August period is more of a free spirit behaviour. You can move around with
shorts, feel relaxed in your behaviour and in general, there is a feeling of
a festive occasion and psychology, to invite friends for light (is there
such a thing in Cyprus??) dinner/lunch and have all sorts of conversation
(Cypriot men usually discussing sexual jokes and football and women about
fashion and gossip who wore...
Read Article |
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Insure Your Building Correctly |
Antonis Loizou, FRICS 8/8/2010 |
 There
is a great confusion regarding the extent of the apartments in Cyprus and
how this is measured. Each group/developer uses his own methodology of
calculation, so the unsuspecting buyer does not know what he is actually
buying. Various developers and sales people use imaginative approaches of
how the extent should be calculated, usually by giving an exaggerating
picture of the size.
Read Article |
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Comparing Prices for Apartments in Cyprus |
Antonis Loizou, FRICS 1/8/2010 |
 There
is a great confusion regarding the extent of the apartments in Cyprus and
how this is measured. Each group/developer uses his own methodology of
calculation, so the unsuspecting buyer does not know what he is actually
buying. Various developers and sales people use imaginative approaches of
how the extent should be calculated, usually by giving an exaggerating
picture of the size.
Read Article |
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VAT on Property Purchases |
Antonis Loizou, FRICS 25/7/2010 |
 Properties
(buildings not land) with a planning permit after 4/2004, attract a 15% VAT
added on top of the acquisition price. Because there is some confusion on
the whole situation, we will attempt to lay down some basic clarifications.
Read Article |
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Going on Holidays? - Protecting your Real Estate |
Antonis Loizou, FRICS 18/7/2010 |
 It
is a fact that, during the holiday season and especially the summer period,
a lot of people go on holidays for a long period of time, with whole
neighborhoods practically being empty, so there is no “protection” of your
property from the observing eyes of the neighbors. For this reason we wish
to submit to you a few tips how to protect your property since at this point
of time, thefts are on a constant increase.
Read Article |
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Useful Tips for Homes |
Antonis Loizou, FRICS 11/7/2010 |
 In this article we have collected a summary of enquiries that we get from time to time from our readers.
Read Article |
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Limassol’s Golden Year? |
Antonis Loizou, FRICS 4/7/2010 |
 It seems that Limassol has all going for it and the town is fast changing from an ordinary Cyprus town to one which will have major attractions over the next 2-3 years. The town has been fortunate enough to have a most successful Mayor who, he seems, he knows the “ins and outs” of the Government and is “an artist” in attracting E.U. funds. The Municipality together with the local Chamber of Commerce are acting as one and are demanding more and more for this town and Limassol is one or more steps ahead from the other towns.
Read Article |
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Revised Real Estate Statistics - Cyprus Property Sales |
Antonis Loizou, FRICS 27/6/2010 |
 The
Lands Office has recently updated its statistics for
property sales in
Cyprus. It appears that things are improving be it very slowly.
The year 2010 statistics have shown for the same period (Jan-May) an
increase of 22% from the rock bottom year of 2009. Any increase is most
welcomed of course.
What is important however to note is the foreign market
demand, which shows a slight increase of 7%, but it is important to note the
pending situation during the summer season, which is just starting.
Read Article |
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Theory + Practice - Cyprus Property Market |
Antonis Loizou, FRICS 20/6/2010 |
 We
are afraid that we are at a loss to what is happening in the
Cyprus property
market, regarding new developments. Following the Qatar deal and its
approval by the House, all sorts of new projects are being announced almost
every week, of multi million euros worth. So, we do have the
Limassol Olympic tower (in fact it is now
under development), the Limassol Land Mark, a very large multi storey
project, a new one at the ex-Halepi site in the Nicosia centre, a new
project at Larnaca of 35 floors, another 3 multi storey projects in Nicosia,
the ex Electricity Authority of Cyprus site at Santa Rosa avenue, the
Limassol marina (under way), the just issued permit for
Larnaca
golf, the Kykko monastery site of 300.000m² land, as well as
...
Read Article |
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Resales + Problematic Developers |
Antonis Loizou, FRICS 13/6/2010 |
 Those
who buy property with no titles must bear in mind the possibility of selling
their property in the future. For this reason there must be a clause in the
original sales agreement that the buyer has the right to sell his property
to a third party and it is a condition to the contract that the developer
facilitates such a resale by entering into a cancellation agreement with the
first buyer and to make a new sales contract with the new buyer. This is
most crucial bearing in mind the time that it takes to have a title been
issued. If such a clause is not included, then the original buyer is at the
mercy of the developer to decide whether he says yes or no. So in such cases
the original buyer is “enslaved” for ever until titles are issued. It is
... Read Article |
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Common Expenses + Private Liability |
Antonis Loizou, FRICS 6/6/2010 |
 Capital
gains tax is payable by both residents and non-residents at a rate of 20% on
the gains made from the disposal / sale of immovable property in Cyprus in
relation to the cost acquisition. If the property was acquired prior to
1.1.1980 the property’s value is adopted as at 1.1.1980 and this value is so
recorded on the title deed. If after 1.1.1980 the actual cost of acquisition
is adopted. In both cases the acquisition cost is upgraded/inflated, based
on the cost of living index, so published on a monthly basis by the Cyprus
Government. So, if a property is acquired at a cost of say €170.000 2 years
ago and the index is, say, now +7%, the indexed cost... Read Article |
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Our Competitors Economies + Cyprus |
Antonis Loizou, FRICS 30/5/2010 |
 In
our previous article we reported
a form of accountants’ balance sheet,
which related to the Cypriot real estate and the pending projects that are
programmed to be executed shortly. Since then, a number of new projects have
come up reported as such in the press, one by Kykko Monastery in Nicosia, to
be executed in a very large plot of land (over 100.000 sq.mts.) which will
be developed into hotel / offices / commercial uses, in cooperation with (so
far unknown) foreign investors, at Nicosia-Engomi area and another one in
Limassol by Pafilia with the development of a 35 storey multi use building
across the beach. New projects include the Levendis Foundation exhibition
and apartment complex at Nicosia, Solomos Square,... Read Article |
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Common Expenses V Developers |
Antonis Loizou, FRICS 23/5/2010 |
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 There
is a general confusion regarding the liability of a purchaser towards paying
his share of the common expenses and the relationship between the developer
and the purchaser. So in some cases that we come across, is that the
purchaser does not pay the common expenses, because he has a claim against
the developer. The two are quite unrelated and with regard to the common
expenses, these are expenses related to the running of the project and thus
it has “nothing” to do with the developer. As such by non payment of the
common expenses, one is actually damaging himself/his property. A not well
runned project will quickly fall into disrepair and thus the property’s
value will be reduced, plus the bad publicity amongst the ...
Read Article |
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Balance Sheet of the Cyprus Economy - Do we have hope? |
Antonis Loizou, FRICS 16/5/2010 |
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 Dear
readers, we have prepared for you an “accountancy based balance sheet”
regarding Cyprus future in terms of real estate development. This is a road
map of “things to be done”, in order to offer some sort of hope, but at the
same time, not to dream that everything is OK. Cyprus being such a small
economy, little things, make the economy turn around (our reservations on
the handouts of money to all sorts of people by this Government has been
criticised in a previous article of ours).
Read Article |
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Foreign + Local Estate Agents |
Antonis Loizou, FRICS 2/5/2010 |
 A
new Bill has been submitted to the House of Parliament to amend the Estate
Agents Law. Due to the European Union suggestions, it appears that the local
estate agents are at a disadvantage with regard to the foreign ones, since
local estate agents must have a university degree, one year at least local
experience under supervision of a registered agent and at the end sit exams
on the subject - On the other side, foreign estate agents are required to
have only a high school diploma and only 2 years experience in their own
country, over the last 10 years!! What is most upsetting is that this
amendment has been prepared by the local estate agents registration council,
without discussing it with anybody and as a result the Ministry of the ...
Read Article |
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Our News
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Qatar Valuation Delivered |
22/09/2010 |
The valuation report for the “Qatar” has been delivered on the 20th of
September to the Ministry of Finance by Messrs Antonis Loizou & Associates.
Mr. A. Loizou stated that the
valuation was delivered sooner than the 10-day period, which was the
deadline. “A thorough and in-depth report was prepared; being the first step
in the process. We are waiting for the second step, if deemed necessary
(meetings/discussions with Qatar’s representatives).
I would like to thank once again
the Republic of Cyprus entrusting our Firm with this important task” Mr. A.
Loizou concluded. |
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