We had the opportunity to discuss with the I.M.F. consulting
group which is examining the Cyprus economy and its
recovery, the matter of real estate market.
We have laid down our own thoughts on the subject, which, in
summary is as follows:
The visa/passports is a case to consider and to bear in
mind that notwithstanding that other countries have
similar schemes, we seem to overdo it in the promotion.
It is on the one hand, not as serious as it sounds,
since only .3% they used this system in Cyprus, as
opposed to the total of 99.7% of the total E.U.
countries. But then, we are small as Cyprus and the only
country that has “adopted” the Bail in with our E.U.
partners abandoning us. Why not to target Cyprus again
for this scheme as an example for others?
The sales prices (Limassol) of €15.000/sq.m. for beach units
and €10.000/sq.m. for near the beach is excessive by Cyprus
standards, but it is not by comparison to other cities such
as London, Paris, French/Italian seaside Riviera, Monaco etc
whereas it is higher than that of our top spots competitors
Sales of high end properties are fast and developers cannot
develop fast enough, but there are many other developers
waiting to climb on the golden band wagon and perhaps at
some short time Cyprus should reexamine the
The limitation of 3 years retention of ownership is not
satisfactory since the existing, buyers will most likely
sell their properties within a short period of time
thereafter - Who will absorb the €2 mil./properties? -
Not the locals - Examples of the Pieris Estate situation
The time bomb of the
“sick” system of the common
expenses is an issue which has been ignored by the last
3 Governments entailing huge problems especially for the
high end newcomers who pay an increasing attention to
the good maintenance of buildings. Now that occupiers
are not willing to pay €100 p.m., how will they pay the
€1.000 p.m. common expenses for those high end
The red tape regarding the title issue is still with us.
What is needed is a brand new procedure and not patching
up of the existing system - We have told the IMF that
“Cyprus has as old car which is not working, yet we have
placed a new paint on the car leaving the same engine”.
Banks should take special care on the funding of these
projects that target the new high end properties.
We have explained to IMF that Limassol is
country” and must not be compared with the real estate
situation in Cyprus in general.
We pointed out the con job in the creation regarding the
value of €300.000 (visas) or €500.000 (passports) since
we have now the phenomenon of having a sales of a unit
say for €400.000, but the applicant claiming that its
value is €500.000. This will block the system and the
word “value” should change to
The side effects on the Greek side in the event of a
political solution, the return of Varoshia to its Grekk
owners etc were also discussed (including the return
under the Turkish Cypriot administration).
We have discussed in addition to the tax attraction that
Cyprus offers, also its very low crime rate and the
attraction by families.
We have stated that Cyprus does not attract only Chinese
and Russians but others from all over the world. The
statistics that the Lands Office produces is basic,
whereas there is a wealth of available information on
which the Cyprus and business people can rely (details
regarding nationalities of buyers, type of property and
value bought, location by type etc etc). The data is
there but it is an unexplored wealth.
The legal system in a summary was discussed including
the service of a law suit, delays in hearings and
The cost of living was also discussed to a small extent
and we reported that food cost is going down, as is the
resale accommodation, cars, electricity etc (be it that
expensive cars are on the up emanating from the foreign
buyers primarily, as well as the doctors who do not
issue receipts, auditors and some lawyers who deal with
For these and other matters we had an exchange of views, but
we do not know what the IMF impression of all these is.