Cyprus-Forum.com

[Oneness]

A very interesting revealing insight by Johnson & Johnson but IMO having a bit much of a negative perspective. Cyprus remains one of the cheapest EU countries for property. The UK situation could have worked to Cyprus' advantage if it was in the right position to do so as homeowners there sell up and look for cheaper homes. But the Euro remains high, Spain has become more affordable and Cyprus property owners are notorious for refusing to take a fall in prices. Add to that, major infrastructure improvements are yet to see the light of day. So for the forseeable future, I have to agree that demand from UK will probably remain dead. Russia and Asia are the obvious markets to tap into and it is only a matter of a coherent government policy coming into place before some relief may be afforded for developers and government coffers. I dont see an Immigration office policy holding for long if it is stifling Cyprus' new market.

Also, the government needs to put its funds and the vast dormant EU funds to use and improve the infrastructure in order that Cyprus can claim to be not only cheap but good value. But projects such as increased water desalination capacity and redevelopment of the Larnaca port / marina areas are slow to get off the ground.

Locals in Cyprus are notoriously resistant to price cuts, partly owing to the enormous 19% effective capital gains tax incidence, excluding lifetime allowances whose real value has over the years greatly diminished.

Over the medium term, I dare to disagree with some. I think low activity and flat prices will be the order of the day. Not a 20% or so crash which is already underway in the UK. The Euro is likely to turn at some point this year. But if there will be any activity, its going to have to be from Russia and Asia so the government has got to get its policy in order fast.

[Johnson&Johnson]

Foreigners buy fewer Cyprus properties
Financial Mirror
19/05/2008

The number of Cyprus property deals concluded by foreigners fell 11.7% Year-on-Year in the first quarter of 2008 to 446 from 505 in the same period in 2007 according to the Cyprus Land Registry.

The decline was in tandem with a 20% decline in the total of property deals concluded in the first quarter, which according to the same data fell to 4143 from 5202 in 1Q07. A slump in the UK property market, which usually supplies 60% of all property purchases by foreigners in Cyprus as well as the share appreciation of the euro against sterling were blamed as the principle reason leading to the decline.

With buyers from Russia, the Arab countries and other CIS Republics mostly in the high-end super luxury upper market, a decline in UK property is seen as having a major negative impact on the Cyprus property market, which since 2004 has been gaining in double digits on the belief that other Europeans will flood the island and snap up all property here.

[B0B]

lets not forget some news 'from the kitchen' - new planning permission regulations and new construction standards [eu requirements, you know]
that raise the cost of construction with nearly double digit percentage...
now put that and what everyone mentioned against the fact that real estate business forms about 20% of the gdp
and youd easily see what lies ahead

[simonwjones]

With buyers from Russia, the Arab countries and other CIS Republics mostly in the high-end super luxury upper market, a decline in UK property is seen as having a major negative impact on the Cyprus property market

Music to your ears hey Mr Stavros!

[Johnson&Johnson]

bob
please enlighten us regarding new planning regulations

simon
yes it is good news. too many young local families have been priced out of the market and it is time they were able to buy their own homes

[simonwjones]

bob
please enlighten us regarding new planning regulations

simon
yes it is good news. too many young local families have been priced out of the market and it is time they were able to buy their own homes

Yes, it's just like it over here. Young people now can not get on the housing market. I have a friend who is 38 and still living at home with his folks. He has no chance of being able to afford his own place, not a hope.

[Johnson&Johnson]

the trick is, to tax land instead of labour

this then dampens speculation and discourages house price bubbles from forming

ricardo's law i think it's called... fred harrison wrote a pretty good book about it, for those interested in economics...

[B0B]

Johnson&Johnson - its difficult to summarize it
its called 'selfcontrol' - lots of paperwork and huge responsibility is being completely transferred from the planning office directly to the planners
http://www.moi.gov.cy/moi/tph/tph.nsf/A ... enDocument