The hous­ing cy­cle

Financial Mirror (Cyprus) - - PROPERTY - Μy Antonis Loizou

Like many other things, most of our life­style habits are chang­ing and they now have a cy­cle.

A young cou­ple starts with the ac­qui­si­tion of an apart­ment of 1-2 bed­rooms, then de­pend­ing on their fi­nan­cial abil­ity move on to a larger apart­ment and then to a house. Other than those who have the fi­nan­cial sup­port of their par­ents/ fam­ily, this cy­cle of hous­ing is for the ma­jor­ity. Whereas it is or­di­nary in other coun­tries, in Cyprus it has ap­peared only in the past 15-20 years, since lo­cal at­ti­tudes did not find mov­ing homes ap­peal­ing.

The cy­cle ends when the cou­ple reaches the age of 65 years (plus) and in cases where chil­dren no longer live with the par­ents. Es­pe­cially those who have built in the past huge houses and with spa­cious gar­den, the “aged” cou­ple does not wish to live in a house of more than 200 sq.m., whereas clean­ing and keep­ing in shape a large gar­den is costly (the feel­ing of liv­ing in a “ghost” house is not ap­peal­ing ei­ther). Older house de­sign units can also be­come a prob­lem, such as 1980s de­sign of adopt­ing split level units with 2-3 steps at var­i­ous lev­els. The re­cent change is also af­fected by the pre­vail­ing eco­nomic sit­u­a­tion since the fam­ily home is usu­ally left to the chil­dren (mainly the daugh­ter). Now most chil­dren find their par­ent’s home costly to up­keep, out­dated, re­quir­ing ex­ten­sive mod­ern im­prove­ments and thus new cou­ples have no time/in­cli­na­tion to take it over.

In terms of age groups and based on our ex­pe­ri­ence:

– Com­pact apart­ment of 2-3

Young cou­ple aged 25-35


Mar­ried at age 35-45 Liv­ing at age 45-65

– Larger apart­ment or small house; – Larger house but at the late age

chil­dren leave home.

The older cou­ple, if they suc­ceed to sell/let their prop­erty, are look­ing for a cen­tral apart­ment close to shops and other fa­cil­i­ties within walk­ing dis­tance in the area of 150 sq.m. (max.)– ei­ther to buy or to lease long term.

Chang­ing times and liv­ing habits brought about a new hous­ing time re­quire­ment frame which did not ex­ist be­fore (the house was there for life given at a later stage to the daugh­ter upon mar­riage as a dowry). In the past, par­ents would dis­place them­selves by giv­ing away their house and they were ac­com­mo­dated usu­ally in the rear part of a house named “sub­sidiary house” – an ac­cept­able cir­cum­stance at the time but no more.

Now fam­i­lies are not as close as they used to be, and it dis­tresses us to note an in­creas­ing ten­dency to place the par­ents in an old peo­ple’s home (most of which are an em­bar­rass­ment) be it that some of them have a ho­tel fa­cil­ity. High-end re­tire­ment homes are not avail­able, and we be­lieve that there is room and a good de­mand for such projects (both for lo­cals as well as for­eign res­i­dents).

Sell­ing one’s house and mov­ing into a man­aged com­plex with some fa­cil­i­ties is what is needed, and I do not re­fer to those who are sick or dis­abled. I wrote in the past that an ideal project was the Ker­mia Ho­tel in Ayia Napa which com­prised of two-bed bun­ga­lows with a com­mon/cen­tral build­ing ac­com­mo­dat­ing a café/in­ter­nal pool/a meet­ing room. Now this ho­tel has been sold and placed into tourist use.

For such projects how­ever, we found that a rental/oc­cu­pa­tion fee of EUR 2,000 p.m. is not un­rea­son­able and of course it ap­plies to those who have the fi­nan­cial abil­ity to do it. This cou­pled with food/ser­vices will end up to a to­tal of EUR 3,000 p.m. for two peo­ple. It is rea­son­able in the sense that if the cou­ple sells their house the cap­i­tal re­ceived should go against the rent/liv­ing ex­penses, but then the rel­e­vant project will bear no re­la­tion to those pre­vail­ing, but more on the lines of U.S.A. res­i­den­tial re­tire­ment projects.

In a pro­posal that we have made, re­tired peo­ple could prelet the leased prop­erty for a pe­riod of 10-15 years, with the right to sell the bal­ance of the lease should they have to or want to ter­mi­nate. We tend to think that this type of project is now be­com­ing more of a ne­ces­sity.

As peo­ple tend to live longer (Cyprus av­er­age life ex­pectancy is 75 years for men and women 82). It is ap­pre­ci­ated that the need will be­come an in­creas­ing one and this al­ter­na­tive will be to the ben­e­fit of the par­ents as well as the chil­dren (who have no time for the par­ents). In the past, par­ents would pass on their prop­erty to chil­dren upon death, but there are those who make the mis­take to trans­fer the prop­erty to the chil­dren prior (in hope that the chil­dren will look af­ter them later on) – How wrong this is. So nowa­days, un­der the new law the par­ents in or­der to have some sort of safety, they can trans­fer the prop­erty, re­tain­ing a life in­ter­est. That is, the par­ents have use of the prop­erty for as long as they live (in­clud­ing rental, de­vel­op­ment) duly reg­is­tered on the ti­tle. It is a sort of a black­mail by par­ents to their chil­dren. Prop­erty with life in­ter­ests is an as­set for the par­ents and an as­set for the chil­dren (be it much re­duced in value de­pend­ing on the par­ents age).

Times are chang­ing as Bob Dy­lan said in a song – in­deed they are.

Antonis Loizou F.R.I.C.S. is the Direc­tor of Antonis Loizou & As­so­ciates Ltd., Real Es­tate & Projects De­vel­op­ment Man­agers

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