Confidence comes back to cyprus
Photo: CyprusPictures
Confidence is coming back to the Cypriot property market, after years of being mired in legal and financial troubles.
The island was hit hard by the global financial crisis, which compounded issues already facing the market. Banks used to issue loans in foreign currencies without checking their ability to repay them, while developers were not investigated for their ability to build the properties being purchased. At the same time, title deeds were not issued to some purchasers of properties, leaving them unable to prove ownership, which exacerbated issues surrounding developments left unfinished due to the recession.
Now, though, the island has introduced measures to remedy these problems.
"The banks no longer hand out loans without being certain that borrowers have the ability to repay them and at the same time without explaining to them – the borrowers – the effects of their actions. Also banks check very carefully the viability of the building projects they are financing making it sure that no one will buy a property that will eventually not end up his or her own with a legal title deed," Neil Heaney, CEO of legal specialists Judicare Group, wrote in A Place in the Sun magazine.
Measures to combat title deed issues "will take some time to take effect, given the large numbers of pending applications", he added, but described it as a "much-needed step in the right direction".
The troika, which was responsible for bailing out Cyprus, has also concluded that the island's adjustment programme has been "brought back on track", a verdict welcomed by the Eurogroup.
"The fiscal performance continues to be solid, the debt outlook has improved, and structural reforms are progressing in several areas," said the collecive of EU finance ministers.
"We note with satisfaction the signs that confidence is strengthening, the economy is emerging out of recession, and the stabilization in the labour market, although unemployment remains high."
That confidence has also helped to encourage buyers back to the property market, something boosted by even lower property prices. According to the country's Land Registry, the number of properties sold during June 2015 rose 15 per cent year-on-year, with sales up in all districts except of Limassol.
464 contracts for the sale of commercial and residential properties and land were registered last month, up from the 403 deposited in the same month last year.
Larnaca led the way, with sales rising 37 per cent, followed by Famagusta (27 per cent), Paphos (20 per cent) and Nicosia (13 per cent).
Overall sales in the first half of 2015 are now 6 per cent higher compared to the same period in 2014 - up from the 0.2 per cent annual growth recorded in the first five months in 2015.
On TheMoveChannel.com, demand for Cypriot property has risen: in June 2015, the country climbed three places in the monthly Top of the Props chart to become the 17th most popular destination in the world.