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Cyprus: Price cuts 'failing'

Wednesday, March 10, 2010

Source: Catherine Deshayes

Price cuts of up to 30 percent being offered by some developers are failing to attract foreign property buyers to Cyprus following negative publicity and government inaction.

The latest figures from the Department of Lands and Surveys show that 146 property contracts for foreign buyers were deposited last month compared with 160 a year ago. Foreign sales in February were down 9% on the same period in 2009.

Although property sales in Nicosia rose by 73%, it is unlikely that this was due to overseas investors as it is not an area favoured by expatriate second home buyers.

In all but one of the investment hotspots the decline is continuing, but at a slower rate than reported last month. Sales in Larnaca were down 29%, in Limassol they fell by 17%, and in Paphos (where some developers have been offering 30% discounts and other incentives) they were down by 41%.

Vulture funds

Sales in Famagusta rose 78% compared with a year ago, but this may be due to British expats who can no longer afford their mortgage repayments selling to ‘vulture funds' and individual investors who are picking up distressed property at rock bottom prices.

The Interior Minister promised that new legislation to deal with the Title Deed problem would be ready by the end of 2008. But this statement, like similar vacuous statements made by his predecessors, proved to be nothing more than hot air.

However, in July 2009 the Interior Minister proposed legislation designed to deal with the Title Deed problem and invited comments from interested parties. But the proposals were criticised by many, including the Cyprus Bar Association who rejected them saying that they would "lead us into a labyrinth without solving the problem". The government is continuing to work on legislation to resolve the problem, allegedly.

A recent High Court ruling in London that the Orams must demolish their villa in the occupied area of Cyprus and give back the land to the original owner has confused many potential buyers and put them off buying property on the Island.

www.news.cyprus-property-buyers.com