Cyprus Property News: Issue 25 | May 2011 | Antonis Loizou & Associates

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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 the largest and most comprehensive professional firm of Chartered Surveyors in Cyprus and the Eastern Mediterranean over the last 20 years. The firm employs 60 members of staff across 8 offices in Cyprus and Romania, 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 25,
May 2011

Cyprus Economy

Euro area annual inflation is expected to be 2.8% in April 2011 according to a flash estimate issued by Eurostat, compared to 2.7% in March, 2011. For Cyprus the annual inflation rate for March 2011 was at 3.2% compared to a 3.1% in February 2011.
• Eurostat announced that unemployment in Cyprus remained at 7.2% in March 2011 , the same as February 2011. The euro area seasonally-adjusted unemployment rate was 9.9% in March 2011, the same as February 2011.
• The Ministry of Finance will maintained its 1.5 % growth forecast for the economy this year, while cutting its estimate for 2012 to 2.5 % from 3 %. The budget deficit will narrow this year to 4 % of gross domestic product, from 5.3 % in 2010, and is likely to decline to 2.6 % next year, the ministry said in a statement on its website in which it presents its medium-term budgetary strategy. The previous 2011 deficit forecast stood at 4.5 percent.
• The governor of the Central Bank of Cyprus, Athanasios Orphanides has stated that Cyprus’s major banks have enough capital to withstand a potential restructuring of Greek government debt. He went on to say “We carried out analyses and checked some scenarios and our major banks have such a strong capital base that they may withstand negative scenarios”.
• Parliament has passed a bank tax aimed at boosting state revenue and financing a planned support fund that will protect investors’ deposits. A levy of 0.095 % on local bank deposits “will create 70 million euros over two years in state revenues and a further 50 million euros that will flow to a deposits protection fund in 2013”, said government spokesman Stefanos Stefanou. The levy will not expire in 2013 as originally planned, so will continue to generate cash for the support fund; the Central Bank of Cyprus will determine the rate of the tax. Money from the fund will be used exclusively for the protection of depositors and not to bail out struggling banks. The fund needs 500 million euros in capital, Central Bank governor Athanasios Orphanides said on March 28.
• According to the Statistics Department of Cyprus, revenue from tourism rose 3.1% in the first quarter , following an influx of Russian tourists with increased spending. Revenue increased to 133.1 million euros, from 129.2 million euros in the same period of 2010. The number of Russian visitors over the quarter climbed around 48 % and they spent an average per person of 2,906 euros, up from 2,835.6 euros.

Cyprus Property Market

• The 62nd FIABCI world congress is to be held between the 16 - 21 May in Paphos, attracting global leaders from the real estate industry. The congress will be materialized under the Auspices of His Excellency Mr. Dimitris Christofias, President of the Republic of Cyprus.
• The TownPlanning Department has launched a competition to design Nicosia’s old GSP stadium area. The competition is open to all European architects and offers cash prizes of €130,000 for the winning design, €100,000 for second place and €70,000 for third, in order to attract entries from higher profile architects. Several features that are to be included in the 13,500m² plot have already been decided following a referendum of Nicosia residents in 2008. These include an underground car park for some 1,650 cars, a large green area and a small number of shops and cafes to service visitors to the park.
• The Orphanides Shopping Centre in Nicosia, is to be revamped by September 2011. The new project will be renamed Nicosia City Mall and will incorporate artificial ponds, waterfalls, καταρράκτες, specialised lighting fittings, cafeterias and restaurants and a new more comfortable layout, a play area and many more facilities. The project was presented by the president of the company Mr. Christos Orphanides, who went on to say that “after 12 years since the initial operation of the shopping centre, the space will be changed both internally and externally”.
• The Land Registry is to submit to the Minister of Interior by the end of May, it’s valuation per location, as per the new ‘Town Planning Amnesty’ legislation , which will allow many property owners with minor planning violations to obtain separate Tittle Deeds.

Global Property Market

• Cash buyers in the UK are driving the housing market. Figures compiled by the Council of Mortgage Lenders (CML) show that in January 2011, nearly 40% of buyers did not need a loan to buy their home. This means the proportion of cash buyers has more than doubled since 2005, when the records began. This in turn suggests the market is increasingly the domain of the cash-rich, with many other buyers shut out.
• Weak household confidence led UK house prices to fall by 1.4% in April compared with March, the Halifax has said. Prices fell by 3.7% compared with a year ago, with the average home now costing 184,097 euros (GBP160,395). In the three months to April, prices were 1.2% down on the previous quarter.
• The Monetary Policy Committee of the Bank of England again kept interest rates at the historically low level of 0.5 per cent - where they’ve been stuck since March 2009.
• Senior European ministers were locked in secret discussions with Greece that may lead to a restructuring of the embattled nation's mountain of public debt.A restructuring of Greek debt, which would see the terms of the loans extended and borrowing rates reduced, is understood to have been central to the talks. Greece was the first member of the single currency block to fall in May last year, when it accepted a 110bn euros rescue package. Ireland followed in November with 67.5bn euros of external help, and Portugal last month agreed in principle to an 80bn euros deal.
• Rating agency Standard & Poor's (S&P's) has downgraded Greek debt, increasing jitters over the eurozone. S&P's downgrade came as the European Union said it was considering easing financial pressure on Greece and Ireland by cutting interest rates on bailout loans.
• US property prices fell for the 57th consecutive month in March – and showed their biggest fall in three years, according to analysts at Zillow. US house prices dropped by 3% in the first quarter of 2011 – their worst fall in three years, according to housing analysts Zillow.com. American property prices have declined for 57 consecutive months. Values fell 1% between February and March and 8.2% from March 2010. The cumulative decline in house prices, since the market peak in June 2006 is now 29.5%. A record proportion of homes sold in March (37.7%) went for a loss and negative equity reached a new high – with 28.4% of all single-family homes with mortgages underwater. Almost the entire country continued to suffer over the first quarter – with Detroit, Atlanta, Ocala in Florida and Pueblo in Colorado the worst hit. Those lower down the property ladder were hit hardest. Prices in the bottom tier fell 13.9% year-on-year, homes in the middle tier fell 8.7% and homes in the top tier fell 4.3%.

Cost of Debt
	GBP LIBOR		EURIBOR
	9/5/2011	One year ago	9/5/2011	One year ago
3 month	0.82%	0.70%	1.42%	0.68%
6 month	1.11%	0.96%	1.71%	0.98%
12 month	1.58%	1.40%	2.15%	1.25%
2 year	1.54%	1.65%	2.29%	1.30%
3 year	1.93%	2.12%	2.54%	1.58%
5 year	2.60%	2.85%	2.94%	2.20%
10 year	3.51%	3.71%	3.46%	3.08%
15 year	3.86%	4.03%	3.76%	3.42%
30 year	4.01%	3.98%	3.69%	3.30%

RICS Cyprus Property Price Index - Q4 2010	13/05/2011
RICS Cyprus publsihed Q4 2010 of its property price index that monitors property prices and monthly rents across all districts and property types, namely apartments, houses, office, high street retail, and warehouses. Overall, the Index tracks property prices and rents across 46 locations. Download the Index: Q4 - 2010 Previous Quarters: Q3 - 2010, Q2 - 2010, Q1 - 2010, Q4 - 2009

English Articles of the Monthth

Real Estate Target Groups	24/4/2011
During these difficult financial times, most people look upon the civil servants (including the semi Governmental ones) with an eye of envy and jealousy. It is the only working sector of the economy, that not only has not suffered from the crisis but it has actually benefited. At times of plenty, no one bothers really on the Governmental expenses of running the civil service, but at these times, all expenses go through scrutiny. For this reason last week’s reduction of pensions to those politicians and others, who get more than one pension, was a good move, be it, it did not go far enough. Read Article

Personal Guarantors	17/4/2011
When acquiring property (or for any other asset) the seller or the Bank financing the purchase, might ask a third party to become a personal guarantor, guaranteeing the buyer’s abidance of the terms of the contract. This is usually done amongst friends, for children, wife to husbands etc, or if a Co is the contracting party, the major shareholders/directors might be asked to provide a guarantee for the Co. For locals this is a “normal” case, but not so amongst foreign people. A recent case in the lower courts gave hope to the guarantors, since it decided that (in this case) the Bank should have sued the contracting party first (prime debtor) and if it was not satisfied by selling the assets etc and there is a balance due, then and ... Read Article

Suing the Turkish Government for Loss of Use	10/4/2011
Based on the European Court, owners of property within the Turkish Held Areas (T.H.A.) can sue the Turkish Government for the loss of use of their property since the invasion (1974) until today. They can also offer their property for sale or for exchange with Turkish owned properties in the free areas. Action should be taken through the local Committee of Compensation which is based in Cyprus and manned only by Turkish/T.Cypriots. Taking legal action one must provide a valuation, which must be supported by evidence of comparative properties sold/hired during that period. The “loss of use” in this context means the loss of rental income and if .... Read Article

An unreasonable demand?	3/4/2011
We note through our sales team efforts, that foreign (in particular) buyers, demand that a title deed should be issued prior to proceeding with an acquisition. This is very logical and understandable, but there are numerous units/projects which have a building permit, a certificate of final approval and the seller even offers a bank guarantee, guaranteeing the issue of the titles within a certain period, a mortgage release, etc as well as helping with the financing of the buyer. Read Article

Greek Articles of the Month

Προκλητική Παρανομία	17/4/2011
Ο νέος παραλιακός πεζόδρομος στην περιοχή Παραλιμνίου (Πρωταρά) είναι ένα αξιόλογο έργο αρχιτεκτονικής, το οποίο ανέδειξε ένα σχεδόν άγνωστο παραλιακό μέτωπο, ενώ ως τέτοιος, ο πεζόδρομος αυτός, πιστεύουμε ότι αποτελεί ένα έργο αρχιτεκτονικής τέχνης, τόσο και λόγω της κατασκευής του με φιλικά υλικά προς το περιβάλλον, όσο και με τις διάφορες διευκολύνσεις (ρεύμα, φουντάνες νερού, αποβάθρες, αποχωρητήρια κλπ). Ο πεζόδρομος αυτός ξεκινά από το ξενοδοχείο Περνέρα μέχρι και το έργο Ναυσικά. Ο πεζόδρομος αυτός, ο οποίος έχει στο στάδιο αυτό συμπληρωθεί κατά 90%, αναμένεται ότι θα αποπερατωθεί πλήρως μέχρι το ... Read Article

Ανεργία Νέων Επιστημόνων και άλλων	10/4/2011
Υπάρχει αγαπητοί μας αναγνώστες σε όλα τα επαγγέλματα η θεωρία και η πρακτική. Είναι δεδομένη η ανεργία των 28.000 ατόμων με το 20% να αποτελεί ποσοστό των πτυχιούχων (και οι δύο αριθμοί να βρίσκονται σε αυξητική τάση). Είναι επίσης προσεκτή η γενναιόδωρη επιχορήγηση εκ μέρους του κράτους των +-€10.000 ανά άτομο σε περίπτωση εργοδότησης πτυχιούχων ανέργων, όπως είναι προσεκτή και η έλλειψη Κυπρίων νέων σε τεχνικά επαγγέλματα (π.χ. υδραυλικοί, πελεκάνοι, ηλεκτρολόγοι, καλουψιήδες κλπ κλπ). Εμείς ως τεχνικό Γραφείο περιοριζόμεθα στις δικές μας εμπειρίες και με 32 χρόνια ζωής και με τα 60 άτομα προσωπικό, έχουμε εμπειρίες που θα μπορούσαμε να μοιραστούμε μαζί σας ως μια ανταλλαγή... Read Article

Μια Νέα Προσέγγιση - Απόσυρση Τουριστικών Κλινών	3/4/2011
Παρευρεθήκαμε στην παρουσίαση του μέτρου της απόσυρσης των τουριστικών κλινών, σε κοινή παρουσίαση εκ μέρους του Τμήματος Πολεοδομίας και ΚΟΤ. Η παρουσίαση που έλαβε χώρα τόσο στην Λεμεσό, όσο και στην Λάρνακα, ήταν άκρως ενδιαφέρουσα. Μάθαμε αρκετά πράγματα και σας παραθέτουμε τις δικές μας παρατηρήσεις. ... Read Article

Our News

On 11/5/2011 Antonis Loizou & Associates and the Russian Newspaper, ‘Evropa-Kipr’, organized an open seminar on “Property for Russians” in Limassol. The purpose of the seminar was to inform Russians on the state of the property market in Cyprus, with an emphasis on the legal, immigration, tax framework and the workings of the real estate market. Read More

Επ’ ευκαιρίας της διδυμοποίησης της Αγίας Πετρούπολης με τον Δήμο Λεμεσού, διοργανώθηκε στις 4/5/2011 ημερίδα με θέμα επενδυτικές ευκαιρίες στην Λεμεσό και Αγία Πετρούπολη. Ο κ. Αντώνης Λοίζου ανέλυσε την αγορά ακινήτων της Λεμεσού με ιδιαίτερη έμφαση στους Ρώσους επενδυτές και επεξήγησε γιατί η Κύπρος γενικά αλλά ιδιαίτερα η Λεμεσός, αποτελεί ένα κύριο πόλο έλξης επιχειρηματιών από την Ρωσία. Εκτός από τις Δημοτικές Αρχές των πόλεων, στην ημερίδα παρευρέθηκαν και εκπρόσωποι του εμπορικού/βιομηχανικού κόσμου και άλλοι επίσημοι και από τις δύο πλευρές.
Antonis Loizou gave a lecture to the Double Platinum Group at the Hilton Park Hotel Nicosia on 3/5/2011. The attendants comprised of approximately 30 business people and investors from U.S. and other European countries. Members who wish to join the group must earn at least €2.0 mil. p.a.!! The business guru Ted Nicholas made the introduction, A. Loizou analyzed the Cyprus property market and the investment opportunities that exist in Cyprus regarding especially golf, marina, private hospital and primary/secondary schools development etc and a discussion followed.
A new proposal/study was submitted, on 20/4/2011 to the Cyprus Tourist Organization (C.T.O.) and the Ministry of Tourism regarding a new “Mountain Resort Policy” with the aim to help sustain the mountain hotels and places of entertainment, control urbanization and even encourage the return of residents and tourist development in these areas. Antonis Loizou, son of a Platres ex hotelier, has personal experience and a soft spot for the mountains. The study comprising of 50 pages has been well received.
Our Office was invited to the Hilton Hotel on the 16/4/2011, on the occasion of the Carlsberg Chairman Mr Ph. Photiades being awarded by the Academic Achievement Committee of Ahepa Society (the Greek-American Society representing all Greek ex-patriates in the U.S.A.). During the following discussion a lot of interest was created by Mr. Loizou views on the Natura V Compensations and the capability of the Government to meet this heavy financial burden.
A boost for the firm were the comments of two District judges made during 2 separate court hearings where our Office was representing one party as an expert witness. One judge commented that “the witness” may be one of the best two in the island, whereas on the other case, the judge addressing one of the opposing lawyers commented “can’t you see that this is not an ordinary witness (referring to Mr. Loizou) – He cannot be shaken .... please carry on.....”.
Not all court cases are with solem proceeding. In a recent court hearing the lawyer of the opposing party asked the judge to allow Mr. Loizou acting as an expert witness to sit in the witness box since he is “of some age”. To this Mr. Loizou responded “I object on the phrase “some age” and I refuse to sit” to the delight of everybody, including the 3 attending judges.
The Enaerios project in Limassol is progressing in its initial stage. After several technical meetings, Antonis Loizou & Associates ha been appointed by the Municipality Mayor of Limassol to coordinate the development of a 10.000m². commercial seaside plot. Emphasis is placed on the creation of a public square, whereas development will include mainly offices and apartments based on a B.O.T. basis and on a long term land lease.