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The number of real estate transactions in 2014 was up 20%, reaching 4527, compared to 2013 and January 2015 showed an increase of 10% compared to the same month last year. It is widely expected that transactions in 2015 will mark an increase of 10-20% in comparison to 2014.
Based on market records of previous years, normal transactions for Cyprus reach about 10,.000 per year. With that in mind it is expected that transactions in 2015 will be in the region of 50% to 60% of a normal year’s.
As far as prices are concerned, they seem to have followed a downward trend since the middle of 2008, with a slight break in 2010, only to be followed by a sharp decline.
Based on the RICS Real Estate Price Index. the price decline during the last three months of 2014 was only about 1%, a slowdown in price decreases.
Both the number of transactions as well as prices point to a stability trend in the real estate sector.
Projections for the field can only be positive take into account the following:
if one is to
- Banking sector stability allows for new funding in real estate after three years of almost zero lending activity in the sector;
- The recently-announced drop in interest rates by 1% will help businesses and individuals better manage their loans and will be helpful to those seeking new loans to acquire property.
On the minus side, one can refer to the increased taxation in real estate since 2012. Taxes on real estate must be lowered and simplified so that all owners are in a position to understand and calculate how much they will be paying. Preferably, all taxes for real estate should be paid to one centralised government authority or department and let the Ministry of Finance distribute the earned tax revenues to the various recipient bodies.
While the market is showing signs of stabilisation, the government, political parties and MPs are doing their utmost to destroy the market sentiment and hinder the growth of the sector as well as that of the economy.
The government was far too late in tabling the foreclosures and insolvency bills. If state employees had too much on their hands and couldn’t deal with the legislation, the best solution would have been to hire the services of an established law firm to do it for them instead.
Back then, the parties were up in arms over the delay but are now basically adopting the same tactics. They keep discussing the various bills week after week.
The relevant House committee could have set up a strict timetable, working day and night to exhaustively discuss all the relevant bills and reach a decision without further delays.
So, why all the stalling? Don’t they understand that by delaying adoption of the legislation demanded by the bailout plan they are delaying the next injection of cash from the Troika and killing the growth prospects of the economy as well?
Oddly enough everyone, the Troika, the government and the political parties agree that everyone’s main or primary residence of up to a certain value must be safeguarded.
All these delays are in essence helping people owing huge sums of money and strategic non-performers not to repay their loans, thus delaying the liquidity flowing into the market which, in turn, enables the banks to grant more fresh loans.
Could it be that some political parties are following these tactics so that the state economy fails putting them in a position to criticise the economic policies of the government and earn votes? Without of course caring about the country’s prosperity?