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  • 5 December 2018 Cyprus property market on the up

    Specialists are confident over the future of the Cyprus property market,... read more

  • 28 November 2018 Cyprus real estate sector looking up

    Cyprus’ real estate sector is continuing to thrive, building on the upward... read more

  • 5 November 2018 Trapped buyers get Christmas present promise

    The problems faced by the 70,000 ‘trapped buyers’ who were duped into... read more

  • 5 November 2018 Return plan 14 percent VAT for first house plot

    The Finance Ministry pledged Monday to the Parliamentary Finance Committee... read more

  • 3 October 2018 Newzoe Developers in cooperation with Palourtis Estates at Cyprus- Lebanon Business conference " Invest in Cyprus"

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Cypriot Investment Scheme
Repossession Property Yield Properties

Latest news

  • 5 December 2018 Cyprus property market on the up

    Specialists are confident over the future of the Cyprus property market,... read more

  • 28 November 2018 Cyprus real estate sector looking up

    Cyprus’ real estate sector is continuing to thrive, building on the upward... read more

  • 5 November 2018 Trapped buyers get Christmas present promise

    The problems faced by the 70,000 ‘trapped buyers’ who were duped into... read more

  • 5 November 2018 Return plan 14 percent VAT for first house plot

    The Finance Ministry pledged Monday to the Parliamentary Finance Committee... read more

  • 3 October 2018 Newzoe Developers in cooperation with Palourtis Estates at Cyprus- Lebanon Business conference " Invest in Cyprus"

    read more

Cyprus property market on the up

Specialists are confident over the future of the Cyprus property market, saying that the upward trend in house prices is combined with an ongoing increase in demand for real estate.

   

REAL ESTATE experts believe the Cyprus property market is on the up but are wary that repossessed houses dumped on the market could derail the grassroots of recovery.

The House Price Index (HPI) reached 103.98 units for the second quarter of the year, increasing by 0.6% compared to the first three months of 2018.

The year-on-year increase of the index stands at 1.2% continuing the positive trend of the past few years, pleasing Real Estate specialists. But they are concerned about how investment funds acquiring properties linked to NPLs will choose to unload these assets to the market.

Property specialists are confident over the future of the sector, saying that the upward trend in house prices is combined with an ongoing increase in demand for real estate.

According to data from the Land Registry, 4,500 homes were sold in the first half of the year, 27% more than the number of transactions filed with the registry for the same period in 2017.

Experts expect the trend to continue throughout 2018 surpassing last year’s sales which reached an eight-year high with 8,734 transactions. In 2017 property sales on the island saw a staggering 132% growth from 2013 when sales had dropped to under half of what they were in 2010, the sector also grew by 24% from 2016.

According to the preliminary results of research conducted by a group of real estate specialists, Limassol and foreign investors are still driving the market with 37% of transactions carried out in Cyprus’ second city, followed by Paphos with 23%, Nicosia with 18%, Larnaca 15% and lastly Famagusta with 7%.

All districts have recorded a significant rise in transactions with even Larnaca, the only district with a negative growth index for 2017, recording a 15% rise in property sales.

“The investment for citizenship scheme is still playing its role in market growth. Transactions involving foreign investors have more than doubled with Limassol and Paphos having the lion’s share with 70% of transactions involving foreigners,” a property specialist explained.

The specialist said that although Paphos is leading the charts as far as the number of actual transactions involving foreign investors is concerned, with 39%, properties sold in Limassol are worth substantially more.

Optimism over the future of the real estate sector also stems from the rise in the number of building permits issued and the diversification of projects.

The specialist said that 3,100 permits were issued in the first half of 2018 compared to 2,900 in the same period last year.

“We are not talking about only an increase in absolute number, but also of an increase in the value of projects for which licenses have been issued in the first six months of the year which amounts to €750 million. In the same period in 2017, projects obtaining licenses were worth €650 million,” he said.

Cypriot demand for property

The specialist said there is a serious increase in the number of property sales to local buyers and this is evident by the number of transactions carried out in the capital and building permits issued for Nicosia projects.

“If one is to look at sales carried out in each district, you will see that the capital has recorded an impressive YoY increase of 34% in transactions, the vast majority involving houses and Cypriot buyers.”

Adding to the picture, Nicosia leads in building permits issued with 39% of the total, keeping Limassol in second place with 29%.

It comes as no surprise that a significant chunk of activity regards the construction of houses said the specialist.

“It’s only natural that the key finding of reports concerning the sector is that a significant chunk of the industry’s activity concerns housing. Neither should it come as a surprise that Nicosia is leading the statistics regarding building permits.”

Other data shows that Nicosia has seen property sales go from 1,200 in 2016 to 1,485 in 2017 with current data indicating that sales in 2018 will surpass those of last year.

Cypriot demand for housing was put on ice during the years of the crisis as people were living with the uncertainty of the times but as the economy grows confidence is back and more mortgages are available.

An increase in the numbers of students studying at the Nicosia-based universities has created a shortage in housing which has, in turn, pushed up demands with more flats being built.

However, the high number of NPLs linked to property is a negative factor.

Chairman of the Cyprus Property Owners Association George Mouskides, said that he is not concerned so much over the growing repossessed property portfolios of the banks, as he is over the sale of asset-backed bad loans to investment funds.

“Banks have been very reasonable and cautious so as not to cause damage or a crash in the market,” said Mouskides.

The Bank of Cyprus sold NPLs to the Apollo Fund that are linked to some 9,000 properties.

BoC has sold a portfolio of 14,000 loans with a nominal value of €5.7 million which are linked to assets worth €2.8 billion at half the price (€1.4 billion).

Mouskides, however, feels that funds wanting to sell off their portfolios at values much lower than the market rate may not be a plausible scenario.

“Just like banks, funds will also seek to protect their investments and not cause an abrupt drop in prices by unloading a large number of properties to the market”.

“I do not expect to see funds selling off properties at prices below 75% of their estimated value. Sales carried out these days are usually with a price tag of 80% of the property’s estimated value. It would not be the end of the world if prices fall by even 5% as the most important thing now is to keep prices at a healthy level,” argued Mouskides.

He believes the high levels of asset-backed NPLs are currently providing a ceiling on property prices, keeping prices at a manageable level with a small growth, rather than posing a threat to the market. 

Read more at: http://www.news.cyprus-property-buyers.com/2018/10/15/cyprus-property-market-on-the-up/id=00154804


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