Foreign investment in the Cyprus real estate market continues to lag, despite offers of discounts by developers. This contributed to a sharp drop in overall sales for January, and downgraded the market’s prospects for 2010. An exodus of British expats comes on the heels of a title deed debacle that left thousands in Cyprus with no recognized proof of home ownership. See the following article from Property Wire for more on this.
Foreign real estate buyers are not yet returning to the Cyprus property market after a year dominated by adverse headlines and falling prices.
The latest figures from the Department of Lands and Surveys shows that there were just 94 contracts of sale for foreign buyers last month compared with 131 a year ago. Overall sales in January were down 28% on the same period in 2009.
Although property sales in Nicosia bucked the trend, increasing by 125%, it is not a popular location for overseas investors. In all the areas favored by expats, second home owners and foreign buyers, the sharp decline is continuing. Sales in Larnaca were down 46%, in Paphos they fell by 45%, and in Limassol they were down by 35%.
The increase in sales in Nicosia is probably due to Cypriots taking advantage of opportunities in the market, according to Solomon Kourouklides, President of the Cyprus Real Estate Agents’ Association.
‘The latest increase is attributable to the opportunities in the market. Many Cypriot individuals and investors have bought properties from non-Cypriots or Cypriots who cannot pay off their loans. But these opportunities will run out,’ he told StockWatch.
He does not believe that the real estate market in Cyprus is likely to improve much in 2010. ‘If the economic parameters remain the same, we believe that the market will remain at the same level as in 2009, while there is a possibility of a slight deterioration,’ he said.
Also Land Registry figures do not identify the type of property that was sold and so the increased figures include sales of retail, warehouse, office property and land as well as apartments and houses.
Some property developers have been offering discounts of up to 30% on a number of their completed and near-completed projects in attempts to attract buyers and British expatriates have been selling their homes at bottom prices and returning to the UK.
Although they have improved on last year, the January 2010 sales figures are some 65% below those for January 2008.
Continued adverse publicity about the title deeds scandal in Cyprus with tens of thousands of owners still without official proof that they own their homes and a High Court ruling in London that a British couple must demolish their villa in Northern Cyprus and give back the land to the original owner, has also put people off buying on the Mediterranean island.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.