Photo: Yeliseev
293 sales contracts were deposited at the Land Registry in January 2014, 22 per cent lower than January 2013. The latest decline follows the lowest level of sales in 2013 since records began in 2000. With 71 per cent of January 2014's transactions made up of domestic deals, and the island's unemployment levels remaining high, the country's economic slump is holding down the housing market.
"With thousands of unsold properties littering the island, record levels of unemployment, lack of liquidity and fears over the state of the economy, the real estate market seems to be going from bad to worse," sums up Nigel Howarth at Cyprus Property News.
The negative outlook is likely to be shared be many. There is a small glimmer of hope, though, as overseas sales of Cypriot property actually increased last month, according to the Department of Lands and Surveys.
Indeed, international sales jumped 18 per cent year-on-year in January 2014, rising in every area except for Limassol. In Famagusta, 11 properties were sold in January, a vast improvement upon the one property sold in January last year. Larnaca saw sales surge 36 per cent, while Nicosia's property deals rose 18 per cent. Tourist favourite Paphos saw transactions rise 6 per cent.
The figures follow a rise in buyer interest on TheMoveChannel.com at the end of last year. In October 2013, Cyprus climbed eight places in the portal's rankings of the top 40 most popular countries into 12th place, before rising another two spots into the top 10 for the first time since January 2013,
In a situation not dissimilar to Spain, Cyprus is increasingly reliant upon foreign investors to bolster its housing market. Both countries have introduced residency for investment schemes that grant permits to non-EU buyers who invest a substantial amount in property, with Chinese buyers particularly sought after by agents. Recent figures from a government official suggest that the initiative has had a positive impact, with foreign investment totalling €500 million over the past year, driven primarily by real estate.
The recovery continues to be threatened, though, by ongoing issues surrounding un-issued Title Deeds. Some buyers have been told they have to contribute money towards paying off developers' debts in order to obtain Title Deeds, an issue that has been questioned repeated by MEPs.
Now, though, despite the doom and gloom situation and economic uncertainty, international lenders are forecasting a positive year for Cypriot property. The European Commission, European Central Bank and the International Monetary Fund (Troika) met with the Cyprus land and Building Developers Association this month, where they shared their optimistic outlook.
"What the Troika agrees upon is that if we want to restart the economy, the real estate sector must be supported," LBDA Chairman Pantelis Leptos told In Cyprus.
"They see an important improvement of the situation in 2014 in terms of real estate," he commented, citing the €500 million in investments that had come in from overseas.
“These are fresh investments and money that the economy needed and the Troika acknowledges that these investments were made at the most difficult point in the last decades. So these are positive things and there is more that we can do,” he added.
Leptos also offered several proposals from the LBDA that could help to kick-start the property sector, including the abolition of transfer fees, reduced capital gains tax for reinvestment and, of course, the acceleration of the issuance of Title Deeds.
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Cyprus, Property Investment, Cypriot property, Cyprus land