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Financial Mirror (Cyprus) - - FRONT PAGE -

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?

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