Cyprus property market heading for crash
Cyprus property market heading for crash
http://www.londongreeknews.co.uk/index.php?show=story_template&nwsflag=news&iden=st1_26042007.xml
Following the patterns recently reported in the Spanish property market that the housing market is on the brink of collapse, Cyprus the destination for many holiday home buyers from the UK is recording negative drops in value.
Much of the problem lies in the fact that the property developers in Cyprus have over developed certain parts of the island without due consideration to the demand and the costs in the region.
Leading sellers of property BuySell Cyprus have reported 2-3 per cent point drops in real estate in the island, whilst the occupied territories have experienced a complete drying up of demand for property given the issues of contested ownership.
Many of the large developers from Cyprus have resorted to expensive roadshows in the UK to attract custom and offer budget or free travel and accomodation.
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Real estate agents confident that Spain crisis won’t affect Cyprus
By Leo Leonidou
ESTATE agents and property specialists have said that the predicted collapse of the Spanish housing market will not affect Cyprus.
Paris Zachariades, Executive President of Century 21, a global player in the real estate network, yesterday told the Mail that the market in Cyprus was still on an upward trend due to low interest rates. “Our economy is strong and we are attracting more buyers from foreign markets, not historically linked to us,” he said.
“Things may change in the long-run after we join the euro zone, but at the moment, I don’t believe that what’s happening in Spain will affect Cyprus.”
Property law specialist George Coucounis agreed. “We are a small country with a stable market, strong climate and low crime rate,” he explained. “Prices and demand will continue to rise for some time, with more and more foreigners buying property on the island. In addition, land is limited, which fuels price rises.”
He added that, “nobody can compare Cyprus to Spain, which has a huge number of properties, and if I’m being honest, I kind of expected what’s now happening in Spain. The market there is tired, with some estate agents in the UK I know telling me that they are now promoting Cyprus, Romania and Bulgaria rather than Spain.”
Property valuer and chartered surveyor Antonis Loizou explained that, “unless a crash of monumental proportions hits Spain, I don’t think Cyprus will be affected. The first thing that buyers look for is the country, with price being second on their wish list. If we look at everything on an equal basis, Spain is more expensive than we are, so I’m not worried.”
Last Wednesday, Spain’s Economy Minister sought to quell anxieties about the stability of the country’s property market, after a slide in stocks seemed to confirm fears that the decade-long boom was facing collapse.
Pedro Solbes told the Senate he was not concerned about the state of the market, despite the fact that construction, property firms and banks they have borrowed from lost more than two billion euros in market value last Tuesday and pulled the IBEX, Spain’s blue-chip index, down 2.7 per cent.
Fears that the Spanish property bubble might soon burst have been gathering pace over recent days.
A government report last week showed that house prices in Spain increased by 7.2 per cent in the year to March, compared with an average annual rate of 15 per cent since 1999, buoyed by the holiday home market and an influx of immigrants.
Low interest rates in Europe have fuelled the property market in Spain in recent years, but cheap money has led to speculators building more homes than required.
Last year more than 800,000 new homes were built in Spain, which amounted to more than in the UK, France and Germany combined.
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