Sales data: an un­tapped wealth

Financial Mirror (Cyprus) - - FRONT PAGE -

Since 2000, the Land Reg­istry pub­lishes monthly prop­erty sales by district, sep­a­rat­ing sales into lo­cal and for­eign (based on ti­tle deeds). This in­for­ma­tion is very use­ful and is a mar­ket in­stru­ment, show­ing trends and fluc­tu­a­tions in de­mand.

But it is time this data is ex­tended through fur­ther anal­y­sis and which will pro­vide a very good in­di­ca­tion of the real es­tate mar­ket de­vel­op­ment, es­pe­cially now with the in­ter­est by for­eign­ers, fore­clo­sures, forced sales, etc.

There­fore, it would be good for the trans­ac­tions sub­mit­ted to the Land Reg­istry to in­clude the fol­low­ing:

• The num­ber of for­eign­ers to be bro­ken down by nationality. This will help both de­vel­op­ers and the state to see where de­mand is com­ing from, and thus to be able to tar­get the source of that de­mand.

• The ref­er­ence to the pur­pose of the sale will be an ad­di­tional com­po­nent, whether these are for the res­i­dency and pass­ports schemes, as hol­i­day homes, for in­vest­ments, etc. A short ques­tion­naire with 5-6 ques­tions dur­ing the trans­ac­tion will greatly help.

• The value of the sale is also crit­i­cal. Sales to for­eign buy­ers may be in the range of 30% of all deals, but in value terms this may be 70% of the to­tal (in­clud­ing sales of ho­tels, malls, etc. which are clas­si­fied as a sin­gle unit equiv­a­lent to an apart­ment worth EUR 100,000).

• The sta­tis­ti­cal re­port should also re­fer to the type of the prop­erty, eg. res­i­den­tial, com­mer­cial, of­fice, agri­cul­tural plot or field, house, ho­tel, shop, etc.

• In the prepa­ra­tion of such ques­tion­naires, the Sta­tis­ti­cal Of­fice should also help, while the to­tal amount and the qual­ity of the real es­tate sales will be an in­di­ca­tor for the state in terms of cap­i­tal in­flow from abroad, and the be­havioural trends of the lo­cals.

• There re­mains, of course, the prob­lem of sales by some com­pa­nies that may be based in Cyprus, but share­hold­ers are for­eign­ers.

• Fi­nally, the sales by type and value will give very use­ful mar­ket in­for­ma­tion guid­ing both de­vel­op­ers and banks, as well as the state to fo­cus bet­ter on at­tract­ing in­vestors depend­ing on the type of prop­er­ties that are in de­mand.

What I am propos­ing is noth­ing new, but should be sim­i­lar to the in­for­ma­tion that the Cyprus Tourism Or­gan­i­sa­tion col­lects in its monthly Pas­sen­ger Re­view, re­gard­ing statis­tics for all ar­rivals and de­par­tures, not just tourists.

As for the cost of such ef­forts I don’t think that it should be more than EUR 50,000 a year (since the data ex­ists, but merely needs to be clas­si­fied), but the ben­e­fits to the econ­omy will be enor­mous. An econ­omy that de­pends to a large ex­tent on the con­struc­tion in­dus­try worth about EUR 2.7 bil­lion so far based on for­eign buy­ers in the last three years and with a grow­ing trend. The in­dus­try needs to be sup­ported by such tools in order to en­sure its proper op­er­a­tion, while apart from mar­ket guid­ance, it could also help the Gov­ern­ment de­sign its fu­ture pol­icy on land de­vel­op­ment and tax rev­enue.

It would also be very use­ful to an­a­lyse the data from the fore­clo­sures. If there is in­ter­est, it is im­por­tant to de­ter­mine the prices of these sales, even based on val­ues de­ter­mined on 1.1.2013, the type of prop­erty for which there is the de­mand and the in­ten­sity of de­mand. Per­haps lenders should hire a com­mon firm that will an­a­lyse the fore­clo­sures, as it will be­come a very use­ful tool, both for the fur­ther de­vel­op­ment of fore­clo­sures, and for any new loans. If all lenders or fi­nanciers con­trib­ute even the an­nual amount of EUR 3050,000 (around 7,000 each), this new tool will in­form of all de­vel­op­ments, the rate and type of dis­posal, value, etc.

Per­haps an ini­tia­tive of the In­te­rior or Fi­nance Min­istries and the As­so­ci­a­tion of Banks would be a start.

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