Property professionals in Cyprus have reacted with cautious optimism after new figures reveal the island’s property slump could be on the verge of reversing, news.cyprus-property-buyers.com reports.
Whilst the number of new contracts deposited at the Cypriot Land Registry still posted a decline during the most part of 2013, it was a decidedly less sharp drop than in recent years.
Figures published by the Department of Lands and Surveys showed that in November 2012, some 444 contracts were deposited. In November 2013, meanwhile, this had fallen to 394. Whilst this is still a decline (of 11 per cent), it is a much slower one than the island has experienced since the financial crash. As such, property professionals have suggested this could be a sign of changing fortunes to come for Cypriot property.
It could also prove to be a good time to invest for foreign buyers, in order to make the most of still low prices before the market really begins to find its feet once more. This, too, was noted in the figures, as 24 per cent of the new contracts (96 in total) were from overseas investors.
The news comes at a time when Brits who have already bought homes in Cyprus are being advised they may be entitled to claim for mis-selling. This is because many Cypriot banks, between 2003 and 2010, advised buyers to take out a mortgage in Swiss francs in order to take advantage of much lower interest rates.
With the financial crash seeing the franc value soar, however, many have been left out of pocket. As such, guardian.co.uk claims, many may be entitled to claim for mis-selling.
THE British High Commission yesterday welcomed a government initiative to coordinate efforts to resolve title deeds problem facing British home buyers here.
“We welcome the Cypriot Government’s plans to work towards a solution to the property issues that so many UK and Cypriot nationals face,” a spokesperson told The Cyprus Daily yesterday.
“And we are grateful for the steps the government has taken so far.
The UK continues to support and offer assistance to the government in their efforts to tackle property issues,” it added.
Cabinet’s decision came at the proposal of the Foreign Minister to tackle property buyers’ complaints against the Republic of Cyprus.
Many British home buyers have complained about failure by Cypriot developers to issue title deeds.
The Cabinet proposal includes cooperation between a ministerial committee to be set up for this purpose- and representatives of ministries and government services with the High Commission.
The High Commission yesterday confirmed there was “an on-going programme of exchange of expertise between the UK and Cyprus on wide range of issues.”
“The UK, will of course, continue to offer assistance to the Cypriot government to help tackle the many property issues faced by homeowners of all nationalities in Cyprus.
“The High Commission will continue to raise concerns with the Cypriot government including at Ministerial level and we continue to work together to find a solution,” it added.
The Commission encourages anyone experiencing problems with property to seek legal advice by engaging an independent lawyer who will be best placed to advise on rights and methods of redress.
The Interior Ministry is responsible for coordinating the cooperation with the High Commission but Reform Commissioner Emmanuella Lambrianides will be responsible for amending the law and monitoring property market issues.
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A controversial bill to regulate rents in Cyprus has been scrapped. Parliament decided against the legislation, penned by opposition party AKEL, on the grounds that it went against the principles of the free market, Cyprus Property News reported. The rental of Cypriot property will continue to be agreed between tenants and landlords, putting an end to months of uncertainty for the market.
The bill was originally passed by parliament in early October to lower residential and commercial rents for a period of one year. If made law, it would have applied to all contracts concluded prior to October 2012. However, president Nicos Anastasiades used his constitutional right to refuse to sign off on the law and it returned to parliament, the news portal explained. Mr Anastasiades believes the law violates Article 26 of the constitution, which protects the liberty of contract.
According to the constitution, “every person has the right to enter freely into any contract subject to such conditions, limitations or restrictions as are laid down by the general principles of the law of contract”. If the law had been passed, this liberty would have been encroached upon and the president argued that the so-called ‘Law of Necessity’ could not be invoked to sidestep the constitution in this instance, Cyprus Property News explained. Such a move is only permissible in exceptional circumstances when public order or national security is at risk.
Prior to the decision to scrap the legislation, experts had declared that it was not the responsibility of the government to meddle in the housing market. Indeed, the Cyprus Property Owners Association warned that it would take any available legal measure if the government intervened, Cyprus Mail reported. Head of the body, Giorgos Strovolides, stated that rental prices are already falling naturally and many landlords are reducing rents to keep tenants. Had the law been passed, it would have been unnecessary and could have created more problems, including deterring foreign investors who are important to keep the market ticking over.
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THIS year has seen a huge increase in the number of South Africans buying property in Cyprus. Cyprus is the third-largest island situated in the Mediterranean and offers a climate similar to SA along with first class medical and education facilities, among other amenities, which is one of the reasons why it is a popular property investment destination.
However, according to Richard Parker, MD of International Dreams which has relocated hundreds of South Africans to Cyprus, the main attraction is the permanent residency scheme. “As part of the European Union (EU), this scheme is currently the most cost effective compared to other EU countries, added to which the permanent residency is for life.”
Parker explains that to qualify for permanent residency on the fast track process, which takes between four and six weeks to approve, the main applicant needs to purchase a new residential property for the minimum value of €300,000 + VAT.
“There are also other qualifiers: proof of offshore income, funds remitted into a fixed deposit account, and a clean police record, but the main qualifier is the purchase of a residential property.”
For South Africans, the fact that they don’t need to live in Cyprus as there is no minimum stay period, coupled with the fact they can rent out their property and only need to pay two-thirds on purchase, is a big advantage
While Cyprus has had its share of problems with the eurozone situation, a recent discovery of a large offshore natural gas deposit sees it back on the road to prosperity. “This gas find has stimulated the Cyprus economy and offers ideal opportunities for South Africans to open a business in the mining engineering and allied sectors,” says Parker.
Aside from the permanent residency opportunities, she says that it’s the excellent quality of life and the solid return on investment opportunities that are driving property investors to seriously consider Cyprus. One of the reasons why investors are looking to Cyprus is the excellent appreciation of property due to the demand for holiday accommodation in its busy tourist locations within walking distance to the beaches, near the promenade or on a bus route. “These properties are always sought after by investors wanting to enjoy a solid euro-based income for six months of the year.” There is also a high demand from foreigners wanting to relocate to Cyprus or own a holiday home there.
“As long as there is a cold winter in Europe, there is always high demand for property in Cyprus.”
Parker believes the natural gas discovery in Cyprus’ exclusive economic zones will employ thousands of foreigners who will either purchase property or want to rent. In addition, being an island there is limited space and a limited number of properties within a 7km wedge of the sea — where people can see the sea, smell the sea or be within a short distance from it.
Cyprus also has one of Europe’s lowest personal tax structures, which means that rental income earned in Cyprus needs to be in excess of €19,500 nett a year before any tax is due. Buying a property in a legal entity is also favourable as Cyprus has the joint-lowest corporate tax rate in Europe with Ireland — capped at 12,5%. There is also no inheritance tax in Cyprus, advantageous for legacy planning.
On a lifestyle level, Cyprus has a plethora of activities available from golf and hiking to sailing and bowls. This, coupled with its low cost of living despite a volatile exchange rate and its double-taxation treaty with SA, makes it an ideal investment node.
When it comes to securing finance in Cyprus, Parker says that the banks are extremely conservative and cautious with their lending to ex-pats. But Leptos Estates — the company International Dreams exclusively represents in Cyprus — offers in-house finance: a nine-year term at a fixed rate of 9% a year. They require a minimum 40%-50% deposit.
“Buying a home overseas is not only a major financial and emotional commitment, but a decision that can be made easier if you get advice from professionals. It is recommended that you always check exactly what you are buying before signing any contracts — the cost of the trip across to the island initially to do the groundwork could save thousands in the long run. A new investment property in a new country is the achievement of a lifetime and an investment in the future for the next generation. In Cyprus the options are the best. Living is laid back and you set your own pace,” Parker concludes.more >>> Comments Off
Despite Egypt’s political instability, it remains one of three key expansion markets for Majid Al Futtaim Properties the Dubai-based mall developer.
“From our perspective, it’s all systems go and we’re not stopping,” Mr Kostas said. “Yes, the instability that’s occurred recently has been unfortunate, but we see it as something that will pass in time, and we’re there for the long haul.”
Egypt is one of the three markets, including the UAE and Saudi Arabia, that the company plans to focus on in the next two to three years, following an extensive strategy review,according to Mr Kostas.
“Once we’ve satisfied ourselves with whatever we can do in those three countries, we’ll look further afield. But for now, we want to be disciplined and really focus on those three countries,” he said.
“Egypt represents a quarter of our business, we’ve been there for over 10 years, and we’re very happy with the performance of our existing assets.”
Majid Al Futtaim Properties began construction work this year on the Mall of Egypt, a 162,500 square metre development outside Cairo, that is due to open in 2015.
The mall will include about 400 retail outlets, a Carrefour hypermarket, an indoor ski slope and an amusement park.
Two further Egyptian malls are at the development and design phase, and the company is looking to acquire further sites.
The developer is also looking to increase its mixed-use and residential portfolio so that it becomes as large as its mall business, according to Mr Kostas.
“In the mixed-use and residential space we currently have about 6 million square metres in total, spread around in Beirut, in Muscat, as well as a couple of sites in Sharjah and a couple of sites here in Dubai,” he said. “Our aspiration is for that business to increase its size so that it contributes as much as our mall business does in the long term.”
The company hoped to make an announcement regarding this in the coming months, he said without elaborating.
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International Dreams helped us choose our perfect Egyptian home in Hurghada. Richard explained everything to us every step of the way so there were no unexpected charges and we were kept up to date with all the construction. We are Very happy with our purchase and are now looking for a second on the same development to rent outMr and Mrs Brown - Newcastle - now hurghada !