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
Issue 8, November 2009
changing composition of property demand
Over the past three months there has been a significant change in the make-up of
demand across Cyprus.
During the first half of the year there was a complete dearth in all types of
demand as fear gripped the market. As overseas buyers deserted the Mediterranean
island, prices showed a downward direction as supply increased and prices of
resale homes fell – especially those being put on the market by UK vendors
taking advantage of the weak sterling.
The latest figures from Cyprus’ Lands and Surveys Department show that
number of properties sold to foreigners in the first nine months of 2009 fell by
76%. Thus, the summer was typified by local buyers seeking
“opportunities”, usually in the form of second hand
holiday homes being offloaded by hard-pressed UK owners.
The last few months have seen an increase in demand from young families and
first-time buyers, who are taking advantage of increased supply and their
new-found bargaining power to get on the property ladder. This offers some hope
to developers and vendors, but brings no comfort to holiday-home developers who
are stranded with poor quality product in secondary locations.
• The real
economy continues to be affected by the global economic turmoil. According to
Eurostat, the unemployment rate has reached 5.4% with the construction sector
been affected the most. The minister of labour announced that the total number
of unemployed reached 19.000 of which 3.134 persons belong to the construction
sector. However, Cyprus ranks only third amongst the EU27 with Latvia at the top
• During the third quarter of 2009, the Cyprus industrial production price index
fell by 1.1% and the retail trade price index by 1.7% compared to the same
period last year.
• Revenue from tourism fell by 19.1% over the year with tourism arrivals down
9.6%. For the period January–September 2009 revenue recorded a fall of 16.1%
compared to the corresponding period of 2008, with tourism arrivals down by
10.7%. Revenue has been hurt by the weak sterling, since the UK still accounts
for more than half of all tourists.
• The public’s expectations for economic recovery reported a large decrease
according to the European Commission. This was mainly due to a drop in
expectations for the construction sector and retail trade.
• The average deposit rate for a one year bond stands at 4.05%, the highest
across the Eurozone. The persistently high interest rates are due to increased
competition by banks for deposits and due to the inability of banks to raise
money (and hence liquidity) in the short run by other means.
Cyprus Property Market
• The Cyprus
property market continues to be handicapped by persistently high property prices
and a lack of debt finance. It appears that vendors refuse to face reality and
continue to insist on 2008-equivalent asking prices, unfazed by the changes in
the economic landscape around them. At the same time banks and COOPs have become
more prudent in the lending criteria, thus stifling opportunistic buyers. High
prices can only lead to the stifling of any recovery, as businesses and the
public face too high prices relative to their profitability/income.
• In the first half of the year, developers tried to attract buyers with gifts
such as free air-conditioning etc. In the second half, they couldn’t bear the
pressure of the economic crisis and decided to cut property prices. The drop in
property demand has pushed the number of unsold flats and houses sharply up and
developers decided to make discounts that reach 30% for fear that worse days
• Property owners without title deeds are facing more misery as two developers
have gone bust potentially leaving them without legal rights to property they
have paid for. What happens to the properties will depend on whether the owner
has lodged documents with the Land Registry to claim title or not. Some property
owners have been told by their banks, that their homes could be taken away in
order to cover the debts.
• The European Commission has approved a Cypriot scheme using special government
bonds to reinforce stability in financial markets and mitigate the effects of
the crisis. Under the scheme, Cyprus would issue special government bonds that
it would lend to credit institutions to use as collateral to obtain liquidity
from the European Central Bank (ECB) and on interbank markets. The credit
institutions would use the liquidity raised for housing loans and loans to
small- and medium- sized enterprises on competitive terms.
• The UK
economy contracted by 0.4% during the third quarter, mainly due to a decline
in the services, distribution, and catering and hotels sectors.
• UK property prices were 2% higher in October compared to the same month the
previous year, with the average home costing £162,038. The increase was in
part driven by lack of properties in the market rather than additional demand,
and was confined to London and the South East and to prime country houses.
• The UK recession has mixed implications for the housing market. A prolonged
recession can lead to higher unemployment and more constraint on workers'
wages. On the other hand, it can contribute to keeping interest rates low,
thus making mortgages more affordable especially to first-time buyers.
• The US economy grew by 3.5% during the third quarter, its first expansion in
more than a year. The expansion was based substantially on a government
spending plan. Despite the positive signs, the challenge for sustainable
organic growth remains high.
• US officials recognize that there is a long way from recovery since the
current unemployment rate remains in substantially high levels (9.8%).
• A sign of the persistence of the crisis, despite many pundits claiming
otherwise, was the announcement of CIT Group’s bankruptcy (the fourth largest
bankruptcy in the US). CIT Group suffered as the credit crisis left it unable
to fund itself, and the recession exposed it to many bad loans.
• According to the European Central Bank, outstanding debt for both companies
and households has decreased by 0.3% and 0.2% respectively indicating that
both parties are in the process of reshaping their balances.
• In Greece, the Director of the Bank of Greece announced that the national
deficit is expected to reach 10-12% for 2009, considerably higher than the 6%
announced earlier in the year. The newly elected government needs to address
several macroeconomic issues including persistently high unemployment, tax
Cost of Debt
||One year ago
||One year ago
The Title Deed - Discussion
Antonis Loizou, FRICS 25/10/2009
Minister of the Interior has taken the title issue problem under hot pursue.
His main worry being that the proposed legislation may be tangled in the
“small politics” of the House and in order to minimize the delays, he has
visited the chiefs of the various political parties ahead, in order to
explain to them his ideas and seek their support. At the same time he has
invited all sorts of professional associations to comment and submit to
him/the Ministry their own proposals on any alterations. Our own views have
been submitted and on our part we have lobbied various Business Groups,
developers, the Cyprus Chamber of Commerce and others to ...
The Nicosia old city - Wrong turning?
Antonis Loizou, FRICS 18/10/2009
For those foreign people who have not visited the old city of Nicosia (within the Venetian walls) it is a place to visit. The unfortunate history of the
city over the recent years (post 1974 invasion) has had its “benefits” to an
extent, since the older preserved buildings were not improved (demolition
and rebuilding - if improvement means this) and it has retained (to an
extent) the old city character in its pre 1950 years. Like most old European
cities and after the change of policy by the Nicosia Municipality
(originally not allowing places of entertainment/cafes etc) the new policy
is one of encouragement for this sort ... Read Article
A Glimpse of Hope?
Antonis Loizou, FRICS 11/10/2009
the last couple of months we have noted a slow revival of the property
market, which has its base demand the locals. Residential units set in
residential town areas have shown an increased demand, which is mainly
directed towards apartments and to a lesser extent for houses. Apartments (2
bed) in the region of €140.000 are the most beneficiaries of such a small
revival and for houses in the region of up to €600.000. Beach properties of
up to €1 mil. (houses 3-4 bedrooms) are also picking up (demand again mainly
from the local source) whereas the more expensive luxurious beach units
whose market had the Russians, is still very slow.
Will it Happen?
Antonis Loizou, FRICS 4/10/2009
are aware of the continuing talks that are taking place between the
President of the Republic and Mr Talat and there is a certain guarded
optimism by some quarters, that there might be a breakthrough for a way
forward to the Cyprus political problem. The question is, how will the real
estate market behave in such an eventuality. A most difficult question to
answer and one which involves a lot of speculation. The possible solution
will involve a lot of emotion, hence the real estate market behavior may not
be rational. In order to examine the affects of a “way forward” very much
will depend on the type of the solution and its conditions...
Μελέτη: Εξασφαλίσεις Δανείων & Υποθήκες
της παρούσας 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.
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Antonis Loizou & Associates promotes
properties in Russia
of Russian citizens turned out to two exhibitions in October 2009 where
Antonis Loizou & Associates Exhibited. One being held in the capital,
Moscow, and the second in St Petersburg. Peter Christofi, Overseas Marketing
Manager for Antonis Loizou said "These exhibitions are invaluable for Cyprus
as it confirms that Cyprus is one the main destination for Russians
purchasing abroad". We have also received a substantial amount of qualified
leads that we are now dealing with.
Training Seminar: New Valuation
training seminar took place last September for the upgrade of the Firm's
valuation system (Pansophic WebEMS), probably the most advanced of its kind
The new system is already six weeks live,
helping with the administration of the vast volume of property valuations
(~9000/y), that the company is instructed mainly from financial institutions.
The system development has now entered into Phase B and more training
seminars are planned for the future.
Theseus Beach Village: CNBC
Residential Property Awards 2009
unique for its standards development 'Theseus Beach Village', Iraklion,
Crete; has won the 'Best Development - Greece'
(over 50 units) in the
European Residential Property Awards 2009.
The award was received by Marios Christophides, president of the development
company TEAK SA.
The study and participation of
the project in the awards was undertaken by Antonis Loizou & Associates.
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