“The in­vest­ment for cit­i­zen­ship scheme is still play­ing its role in mar­ket growth. Trans­ac­tions in­volv­ing for­eign in­vestors have more than dou­bled with Li­mas­sol and Paphos hav­ing the lion’s share”

Financial Mirror (Cyprus) - - CYPRUS -

as a sur­prise that Ni­cosia is lead­ing the sta­tis­tics re­gard­ing build­ing per­mits.”

Other data shows that Ni­cosia has seen prop­erty sales go from 1200 in 2016 to 1485 in 2017 with cur­rent data in­di­cat­ing that sales in 2018 will sur­pass those of last year.

Cypriot de­mand for hous­ing was put on ice dur­ing the years of the cri­sis as peo­ple were liv­ing with the un­cer­tainty of the times but as the econ­omy grows con­fi­dence is back and more mort­gages are avail­able.

An in­crease in the num­bers of stu­dents study­ing at the Ni­cosia-based uni­ver­si­ties has cre­ated a short­age in hous­ing which has, in turn, pushed up de­mands with more flats be­ing built.

How­ever, the high num­ber of NPLs linked to prop­erty is a neg­a­tive fac­tor.

Chair­man of the Cyprus Prop­erty Own­ers As­so­ci­a­tion Ge­orge Mouskides, said that he is not con­cerned so much over the grow­ing re­pos­sessed prop­erty port­fo­lios of the banks, as he is over the sale of as­set-backed bad loans to in­vest­ment funds.

“Banks have been very rea­son­able and cau­tious so as not to cause dam­age or a crash in the mar­ket,” said Mouskides.

The Bank of Cyprus sold NPLs to the Apollo Fund that are linked to some 9,000 prop­er­ties.

BoC has sold a port­fo­lio of 14,000 loans with a nom­i­nal value of EUR 5.7 mln which are linked to as­sets worth 2.8 bln at half the price (1.4 bln).

Mouskides, how­ever, feels that funds want­ing to sell off their port­fo­lios at val­ues much lower than the mar­ket rate may not be a plau­si­ble sce­nario.

“Just like banks, funds will in­vest­ments and not cause an also seek to abrupt drop pro­tect their in prices by un­load­ing a large num­ber of prop­er­ties to the mar­ket”.

“I do not ex­pect to see funds sell­ing off prop­er­ties at prices be­low 75% of their es­ti­mated value. Sales car­ried out these days are usu­ally with a price tag of 80% of the prop­erty’s es­ti­mated value. It would not be the end of the world if prices fall by even 5% as the most im­por­tant thing now is to keep prices at a healthy level,” ar­gued Mouskides.

He be­lieves the high lev­els of as­set-backed NPLs are cur­rently pro­vid­ing a ceil­ing on prop­erty prices, keep­ing prices at a man­age­able level with a small growth, rather than pos­ing a threat to the mar­ket.

Mean­while, the Move­ment Against Re­pos­ses­sions has ac­cused the banks of plan­ning to sell-off peo­ple’s homes im­me­di­ately af­ter ac­quir­ing them, in or­der to make a quick profit.

Ev­ge­nia Moy­seos, rep­re­sen­ta­tive of the move­ment told the Fi­nan­cial Mir­ror that banks are look­ing to get rid of the homes re­pos­sessed as soon as pos­si­ble ei­ther by un­load­ing them onto the mar­ket through auc­tions and sale pro­ce­dures or by sell­ing the prop­erty-backed NPLs to in­vest­ment funds.

She said the banks are even tar­get­ing peo­ple who have agreed to have their loans re­struc­tured and are stick­ing to their re­pay­ment plans.

“Peo­ple who have agreed to ev­ery­thing the bank has asked from them, are get­ting no­tices that their homes are to be sold at auc­tions which are to take place in Fe­bru­ary and March,” said Moy­seos.

She said that home­own­ers are given ten days to re­spond.

“Ten days is nowhere near enough to re­spond and file a mo­tion to have the auc­tion stopped, which is the only course of ac­tion avail­able and banks are aware of that.”

Moy­seos crit­i­cised the govern­ment, call­ing its NPL man­age­ment body and the ESTIA pro­tec­tion scheme as in­ef­fec­tive.

“There is no NPL man­age­ment body… As far as the ESTIA scheme is con­cerned it won’t start be­fore 2019, if ever, while houses are al­ready go­ing un­der the ham­mer,” said Moy­seos.

Main op­po­si­tion party AKEL is pre­par­ing a bill which aims at putting a stop to banks send­ing out re­pos­ses­sion no­tices en masse. AKEL has also cen­sured the Cen­tral Bank for “not forc­ing banks to pro­mote vi­able long-term loan re­struc­tures, al­low­ing them to move ahead with mass re­pos­ses­sions”.

The In­ter­na­tional Mone­tary Fund has ex­pressed con­cern about the moral haz­ard of the plan, which cov­ers al­most all house­holds rather than just those tar­get­ing vul­ner­a­ble groups.

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