Everybody is against Cyprus real estate, is it time to buy?

[Nicholas Wallwork]

Historically, whichever investment market you care to look at, you will see times when every investment adviser is recommending the purchase of shares in a particular company. The fact is that investment advisers and investment researchers very often act like pack animals which can often lead to a self-fulfilling prophecy if they turn positive on [...]

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[Veronica]

With property prices so much lower than at the peak and many vendors desperate to sell this is in my opinion a good time to buy. Once the oilfields come online the prices of properties will inevitably rise a lot so investors who can wait a few years could see a big profit if they were to buy at this time.
Also its a good time for people moving here to buy providing they buy resales with title deeds which will protect them from any problems if the developer goes bankrupt.

Just my opinion of course:smile:

 

[totallyproperty]

I agree with your points - it seems that everyone is against the Cyprus property market, prices keep falling, its all doom and gloom and the end of the world. Even if the economy fell further - there are actually signs of it stablising unless I am mistaken - how much further can property prices fall?

 

[Veronica]

Most private vendors are now holding firm refusing to drop their prices any further.
Developers who have a lot of unsold properties are offering deals on selected projects to try to reduce their stock and repay their banks loans but even they are now reluctant to drop much further.

 

[totallyproperty]

I think in many ways Cyprus has somehow become entwined with Greece in the minds of investors when the situation in Greece is much much worse.

 

[Veronica]

Absolutely, in fact many people think that Cyprus is part of Greece which is of course not the case at all.

 

[totallyproperty]

Veronica, personally I think there is potential to pick up some very cheap property in Cyprus as people really are confused about the situation in the country. There is potential for long term investment growth which people will soon start to recognise - once the tide turns we could see an initial short sharp recovery to more realistic levels.

 

[leonidas5]

I also believe that is a good time to buy in Cyprus with the change of the prices the last years. I suggest a property near the beach with a nice view, preferably a detached house or a villa.

 

[David C]

Essentially investment is as much about timing as location and quality, without doubt the sensible point of investment is somewhere in between a bottomed out property market and a rise in demand within the same market. This point has now been reached. Historically, prices tend to go up rather steeply in Cyprus as demand increases and this will certainly happen again.

I do not necessarily agree with the comment that the majority of investment advisors can be likened to pack animals. And certainly while good advice on investment in Cyprus is generally poor to non existent (by agents, developers and investment advisors alike) It ultimately depends on what they can do for the clients and the level of commission they accept. I certainly believe as an investment adviser here myself that investors need the following:

1) Independent, expert and truly impartial advice
2) A highly experienced architect, based in Cyprus, to ascertain both resale and off plan offerings.
3) Due diligence (by a real expert) especially on large scale investment
4) A genuine understanding of the future of Cyprus in relation to mass development.
5) An independent lawyer who puts the clients needs first
8) On the ground local knowledge
7) A good moral code
8) Sensible commission levels

This is the benchmark standard of service that a potential investor in Cyprus should expect and be given. Also, remember that just because a company is large and established in Cyprus it does not mean that the large or small scale investor, will be given great advice or service. Independent advice is absolutely invaluable here.

 

[totallyproperty]

Any investment whether it be property, shares, etc should be accompanied by expert advice. Those who invest without doing their own homework are taking a very very big risk.

 

[David C]

Of course, I totally agree,

Investment is a risk especially without accurate information. In an ideal world an investor would be able to travel to a destination of choice, would have readily available knowledge of the local scene and be able to obtain great impartial advice. However, in my experience the time this takes is not usually available to most potential investors who are usually looking for guidance within a short timescale. Some investors can take months to formulate a decision while others can do so within a day or two. Seasoned property investors are usually pretty shrewd anyway.

Expert advice is the essential factor in this scenario and I sincerely believe this to be the best in Cyprus particularly with larger investments.

Below is also good advice:

Cyprus Property Investment: Free Investors Guide

 

[davephilips]

Over priced

Hi there, i am looking at buying in Cyprus, I have owned there before and was thinking of going back. After all the financial troubles and the bursting of what was undoubtedly one of the craziest property bubbles around i was expecting to see some sensibly priced property, but unless properties are selling for way under asking prices what i'm seeing on the estate agents websites is still massively expensive and over priced to my mind. Thoughts?

 

[totallyproperty]

Hi Davephilips

While you obviously have more experience of the Cyprus market than many - having invested there before - I get the impression Cyprus often gets tied in with Greece in the eyes of many investors.

There have been issues in Cyprus, of that there is no doubt, but there is a growing opinion that property prices in Cyprus offer good long term value at these levels.

 

[Veronica]

Hi there, i am looking at buying in Cyprus, I have owned there before and was thinking of going back. After all the financial troubles and the bursting of what was undoubtedly one of the craziest property bubbles around i was expecting to see some sensibly priced property, but unless properties are selling for way under asking prices what i'm seeing on the estate agents websites is still massively expensive and over priced to my mind. Thoughts?

Certainly new builds are still priced at far too high a level, but resales are much more realistic these days and many owners will accept offers at below the asking price even though they are already reduced. A lot really depends on the owners circumstances.
If looking for a villa at around 250K for instance be prepared to look at properties up to 50K above your budget in the hope of getting a bargain.

 

[davephilips]

Look at the rents being paid and look at the disconnect with the asking prices for similar properties..... the only conclusion is that the prices are to high. Stop thinking about how much off the peak value these properties are and go back to basics. The fact that they were theoretically once worth 'x' amount at the height of a totally illogical bubble is not a valid argument. Work up from rentable value rather than down from the clouds!

Im a buyer, but not until there has been a more appropriate correction. My guess is that the there must be a whole load of non performing debt but the banks are not pushing debtors for fear of crashing their own balance sheets. Not a sustainable policy in the long term, but while the ECB have bigger problems they will probably 'look the other way' on these banking policies.

Time will tell.

 

[totallyproperty]

Interesting article from the FT about banking issues in Cyprus:--

http://www.ft.com/cms/s/0/188361fa-35e2-11e4-87f8-00144feabdc0.html

Its seems that the banks are now looking to get their house in order which will eventually help the banking system and the property market. Whether we see any short term turbulence remains to be seen.

Regards,


Mark

 

[davephilips]

Great Article Mark, many thanks. So there it is..... 50% of all the banks loan portfolios are "non performing" ...... Even I didn't expect it to be that bad, but now it all makes sense!

Even with this new law on foreclosures, the banks will do all they can to avoid an avalanche as that will destroy property values. What it means to me is that even if prices fall to the point where the number of transactions starts to build, there should not be any price inflation until the portfolio of properties has been moved on. Ten years by my estimation!

So to buy now you have to buy for todays yield, not on some future pipe dream.

 

[totallyproperty]

This is all public knowledge now so you could argue that some of these issues have already been factored into the property market?

Personally from what I read I think there will be some interesting opportunities on the dips and, as Veronica quite rightly pointed out, there is some room for negotiating on properties currently for sale. I would not be so quick to write-off the Cyprus property market just yet.

 

[Veronica]

Actually what isn't mentioned is that many of the non performing loans are mortgages taken out by young Cypriot familes. The banks have been told by the government that these properties should not be foreclosed on as this will lead to families being made homeless. Instead it is proposed that the banks allow the buyers to remain in their homes and pay a rent instead of the mortgage.
Those which will be foreclosed on in the first instance are properties which are not main residences of the owners. In other words investment properties which were bought for rental income. This will be those bought by Cypriots and foreigners alike.
Whether it will later be entended to main residences will become clear in the future if the banks still need to claw in more debts and also how well the scheme to rent to the owners works out.

 

[Cyprus Property Buyer]

I think with the current GBP:EUR exchange rate then it might now be a good time to buy a property in Cyprus if you are British or have access to British pounds. For buyers with Euros then it is probably worth waiting another 12 months or so to see what impact foreclosures have on the market. The expectation is that once the banks start selling the properties at auction then prices will fall further.