Property prices

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The RICS Cyprus Property Price Index with KPMG in Cyprus reveals that property purchase and rental values continued to rise in the fourth quarter of 2022.

According to the Index, the fourth quarter of 2022 saw a further increase in the price of residential properties (apartments and houses), both of which continue to be relatively strong performers over the quarter. Offices also recorded a solid gain while the increase in warehouses was a little more modest. In contrast, retail remains relatively stagnant.

Market values year-on-year

An island-wide increase was observed in the value of all property types:

Apartments up 11.94%

Houses up 8.99%

Retail premises up 1.82%

Warehouses up 4.72%

Offices up 9.02%

Holiday homes

Holiday apartments and houses continue to experience a firm upward trend in their values over the year.

Holiday apartments up 8.31%

Holiday houses up 9.65%

Rental values year-on-year

Rental values made significant gains over the year, with the largest increase recorded in holiday apartments, with warehouse and retail bringing up the rear.

Apartments up 19.60%

Houses up 19.21%

Retail premises up 0.94%

Warehouses up 1.46%

Offices up 10.09%

Holiday apartments up 20.88%

Holiday houses up 13.00%

Rental yields

In the fourth quarter of 2022, rental yields stood at:

Apartments 5.25%

Houses 2.83%

Retail premises 5.67%

Warehouses 4.34%

Offices 5.27%

Holiday apartments 5.41%

Holiday houses 2.71%

On behalf of KPMG in Cyprus, Christophoros Anayiotos, Head of Real Estate Industry Group, commented:

“During the last quarter of 2022 the increasing trend in property values continued in most asset classes, with notable increases in Paphos. The best performing asset classes are again Apartments, followed by Offices and closely by Houses. Retail and Warehouses displayed minor adjustments, apart from a sharp decline in Larnaca Retail. Rental values have also increased, with holiday apartments and residential sector properties (apartments, houses) exhibiting the largest increases – the same trend was also identified in property yields”.

On behalf of RICS, Simon Rubinsohn, RICS Chief Economist, commented:

“The Cypriot economy continued to perform relatively strongly through the back-end of 2022 which helps to explain the continuing increase in real estate prices across the country as demonstrated by the Q4 index. Significantly, feedback to the RICS Global Commercial Property Monitor shows both occupier and investor demand remain firm for now. Some deceleration in the pace of economic growth is likely this year but forward-looking indicators from the Monitor suggest that Cypriot real estate prices will continue to move higher particularly for better quality assets.”

Full details may be found in the RICS Cyprus Property Index with KPMG in Cyprus for Quarter 4 2022

https://www.news.cyprus-property-buyers … d=00167069

Thousands of borrowers have been stung by interest rate hikes as they see their monthly mortgage instalment increase by hundreds of euros, causing concern about the housing market.

With indications the European Central Bank will continue raising interest rates to tackle inflation, fears of a real estate slump have grown.

Since July, the ECB has raised interest rates by three percentage points and has already hinted at an additional 50 basis point (half a percentage point) increase ahead of its March 16 board meeting, with markets now expecting further hikes of 75 bps before the end of summer.

In real terms, the increase has seen monthly mortgage instalments rise by several hundred euros.

The average mortgage interest rate in July was 2.5%, and the maximum could reach 3%.

So, in the summer, if someone had taken out a loan of €200,000 with a repayment period of 20 years, their instalment would have been €1,060.

However, since the ECB has increased rates, mortgage rates are now 5.5% to 5.75%.

With most housing loans being taken out with a flexible interest rate regulated by the market, the monthly payment for a €200,000 loan has increased by €345.

When the additional increase is expected in mid-March, the overall interest rate will be between 6% and 6.3%, meaning the increase will be over €400, pushing the monthly instalment close to 1,470.

This puts additional pressure on households struggling due to high inflation rates, while young couples starting off will think twice before taking on a mortgage.

Talking to the Financial Mirror, Eleni Averkiou, a Danos/BNPRE Group property consultant, said increased interest rates come when the market is picking up pace, building a positive trend.

She said real estate agents have already recorded a drop in demand in the housing market due to rising inflation and interest rates.

“Following the drop of tight COVID measures, we've seen the market take off, mainly driven by local interest and foreign firms and their employees relocating to Cyprus who are looking for housing and office space,” said Averkiou.

Danos believes the market is still on the upside, thanks to locals and foreigners with cash in their pockets.

“This source of the buyer will soon dry out, leaving the industry in search of buyers, while we have seen new local buyers being more hesitant to draw up a loan agreement with a bank.

“We also see a turn to smaller apartments and houses, which is helping the sector remain sustainable through this rough patch,” said Averkiou.

The Danos consultant noted that banks are trying to be helpful, processing the loans as fast as they can, and in the case of credible borrowers, a better interest rate could be on the table.

She argued that authorities should intervene to introduce measures to help unblock the sector.

Negative effects

Averkiou said the one thing authorities should be doing is to find ways to balance out the negative effect of interest rates on households.

“Interest rates and the cost of living have gone up, while salaries have not budged in years.

“The government and the new Finance Minister should be looking into this, finding ways to support new home buyers”.

She proposed the government consider a one-off grant to help families buy their first home.

“This could be combined with projects to breathe new life into city centres, like downtown Nicosia, the suburbs, or even rural areas”.

Although the developments are worrisome for the real estate sector, economists don't feel this could create another wave of non-performing loans.

Ioannis Tirkides, Chief Economist at the Bank of Cyprus, argued that the financial data differ from what they were in 2013 when the banking crisis broke out.

He said housing affordability is a function of the change in income, housing prices, and interest rates, which determine the cost of servicing debts.

“With interest rates higher and real incomes fading because of inflation, affordability is dropping.

“As a result, demand for borrowing will be affected adversely.

“But this doesn't mean that non-performing loans will start to rise to any worrisome extent either in the household or the business sectors,” said Tirkides.

He argues several factors make the current credit situation much more manageable than in previous years and certainly more than the bubble years before the crisis erupted.

“The economy is much larger than ten years ago; loans from residents are much less in absolute terms and in relation to GDP, which is true for businesses and households.

“More importantly, particularly for the business sector, the cost of servicing their debts is significantly less than ever before; employment levels will remain high even with a weakening economy”.

He added that the income level in the economy today is 40% higher than it was ten years ago, while loans by residents are less than half in absolute terms and less than one-third as a ratio to GDP.

“Residents' loans to GDP were 80% at the end of December 2022 compared with 270% at the end of December 2012.”

The economist said that despite the slowing economy, employment levels are expected to remain relatively high, starting from a position of labour shortages in many areas, supporting payment ability.

“Some increases in non-performing loans can be expected, but I wouldn't expect this to be a serious problem in conditions of an economic slowdown as we expect, even in a modest recession which is not anticipated.”

https://www.news.cyprus-property-buyers … d=00167076

Rising interest rates are causing shocks in the Cypriot real estate sector, with the government being called to intervene to prevent any long-term consequences, Council for Registration of Real Estate Agents president Marinos Kineyirou said on Friday.

“Rising inflation has led central banks to take action to contain and reduce it and in doing so, they make frequent increases in their interest rates, which are then transferred through the banks to the interest rates on the loans,” Kineyirou said.

“Obviously, the aim of this so-called aggressive monetary policy is to bring down prices by triggering a reduction in demand, but things are not so simple, and it was no coincidence that we have been reporting on significant challenges on the horizon for the real estate and land development sector since the last summer,” he added.

marinos kineyirou

Council for Registration of Real Estate Agents president Marinos Kineyirou

In terms of lenders, the council president explained that initially, the significant increase in the cost of borrowing, following the rise in lending rates, combined with the soaring cost of construction materials, directly affected the plans of those considering building or buying houses or apartments.

“This is a phenomenon which has already begun to show its teeth in the field as many people are now having second thoughts,” he said.

“Normally, the next solution for housing for those who move away from the housing market is renting,” he added, referencing the sharp rise in rental costs following the increased demand for such properties.

During the second year of this phenomenon, Kineyirou continued, there is another major source of risk approaching the real estate sector, which is also related to the rise in interest rates, but this time is related to deposits.

Some banks have already announced their intention to proceed with increases in their deposit rates later this year.

“And where is the problem with this someone will ask. Isn't it natural for depositors to be paid as well since the banks' interest margin is improving significantly? Obviously, it is normal and legitimate for this to happen but it is expected that it will also have a negative impact on real estate,” Kineyirou said.

He noted that with investors being able to get a return from their money in the bank, this will then discourage them from investing in other areas, such as real estate.

“So we may see a decrease in the number of apartment buildings and residential complexes being constructed or acquired by investors to be made available for rent,” he said.

“If we summarize the above two risks for real estate, which stem from the rise in interest rates, we will see that they create two big problems. The first is the stagnation in the real estate market with all that this entails for professionals in the sector and, by extension, for the state's revenues. The second problem has to do with rents,” he added.

In this regard, Kineyirou said that as the council has previously noted, increased demand contributes to the sharp increase in rental costs.

“Without any desire for scaremongering, I point out the significant probability that the problem of high rent prices will be significantly exacerbated since people who cannot borrow will turn to rent, further fueling demand, while those who have the necessary funds will not invest in real estate, resulting in decreased supply,” Kineyirou stressed.

He also mentioned that the already elevated interest in short-term rental properties across Cyprus' tourist areas makes the problem even worse since this results in more houses and apartments becoming unavailable for local residents.

“As the Council for Registration of Real Estate Agents, we have previously pointed out these risks in a timely manner, cautioning about the dangers they pose. We are doing it again now,” Kineyirou said.

“It is important for the new government to address the issues related to the real estate market and land development in order to prevent unpleasant situations, which will burden the entire economy,” he added.

“We are therefore at its disposal to help boost investor confidence and encourage them to channel capital into the real estate and land development sector. This will increase supply, increase competition in terms of prices, create new jobs, as well as generate revenue for the state,” he concluded.

SOURCE.  https://cyprus-mail.com/2023/03/11/vici … in-cyprus/

Property sales to non-EU citizens more than doubled in the first two months of 2023 compared to the same period in 2022 according to official figures from the Department of Lands and Surveys.

Speaking at the opening of the 5th Property Show, last Friday evening in Nicosia, head of the Department Elikkos Elia noted that non-EU citizens from Russia and the UK were the two largest groups of foreign nationals buying property on the island.

However, the sales figures for EU citizens went in the opposite directing with numbers falling in the first two months.

As we reported earlier, the total number of property sales in February (as measured by the number of contracts deposited at Land Registry offices) reached 1,131; an 8% increase in the number deposited in February 2022 and the highest number on record since 2008.

Market segment analysis

Property sales to the domestic market

Real estate sales to the domestic market in February rose 3% compared to February 2022 but with Nicosia and Limassol reporting falls of 20% and 6% respectively.

Limassol saw the greatest number of sales followed by Nicosia, Larnaca, Paphos and Famagusta.

Domestic sales

Domestic Sale Transactions – 2022/2023 Comparison

Sales to the domestic market during the first two months of 2023 stood at 1,153; a rise of 5% on the 1,094 achieved during the same period last year.

Property sales to overseas citizens

Sales to foreigners (non-Cypriots) were up 69% compared to February 2022 with sales rising in all districts with the exception of Famagusta and Nicosia, where they fell by 30% and 7% respectively

Paphos achieved the greatest number of sales, followed by Limassol, Larnaca, Nicosia and Famagusta.

Property sales to the foreign citizens

Property sales to the overseas market – 2022/2023 Comparison

Foreign real estate sales during the first two months of 2023 reached 1,069; a 31% increase on the 813 achieved in the same period last year.

Property sales to EU citizens

Sales to EU nationals fell 42% compared to February 2022, with sales falling in all districts with the exception of Larnaca.

Paphos achieved the greatest number of sales, followed by Larnaca, Limassol, Nicosia and Famagusta.

Overseas (EU) Sale Transactions – 2022/2023 Comparison

Sales to EU nationals during the first two months of 2023 reached 267; a fall of 37% compared to the 422 achieved in the first two months of last year.

Property sales to non-EU citizens

Sales to non-EU Nationals rose by 69% compared to February 2022, with sales rising in all districts.

Limassol recorded the highest number of sales, followed by Paphos, Larnaca, Nicosia and Famagusta.

Sales to non-EU citizens

Overseas (non-EU) Sale Transactions – 2022/2023 Comparison

Sales to non-EU nationals during the first two months of 2023 reached 802, more than double the number (391) achieved in the first two months of last year.

Source. https://www.news.cyprus-property-buyers … d=00167154

Todays property reality...especially Limassol

In Cyprus's southern coastal city of Limassol, Russian and Ukrainian firms fleeing wartime conditions, and Israeli investors betting on real estate, have driven prices up and local residents out.

Eleni Constantinidou is one of them, pregnant when her landlord terminated her lease. Unable to find an affordable place in her hometown, the Cypriot was forced to move in with her parents, husband and child in tow.

In 2016, it cost her €400 to rent a beachfront apartment in Cyprus's second city where about 176,000 people live.

Now, rent is “€1,500 at a minimum for a two-bedroom apartment,” she told AFP.

“Nothing is accessible for Cypriots anymore. The owners know this, and they are only looking for foreigners,” said Constantinidou, who is in her 30s.

By comparison, in the capital, Nicosia – inland and without a Mediterranean view – a two-bedroom semi-detached ground floor unit can still be rented for around €650 a month.

But Limassol – often nicknamed “Moscow on the Med” – has long been a magnet for Russian speakers.

In February 2022, as Moscow began its invasion of Ukraine, fintech companies began pulling out of the two warring countries and neighbouring Belarus.

Many settled in Limassol to take advantage of the favourable tax environment in Cyprus, and with the lucrative industry came a new class of moneyed professionals.

In May, Russian-language communications company Vestnik Kipra's site counted 3,000 new IT specialists on its roster, a number that has only grown since.

As for Ukrainians, Limassol Mayor Nicos Nicolaides estimated more than 10,000 moved to Limassol since the war, “which is quite a big number.”

Dmitri Leonov, who works for a fintech company and relocated to Cyprus from Moscow before the invasion, said the average salary in the sector is €5,000.

“So, for them, paying €1,500 for rent is not a problem,” he told AFP. “It had a quite deep impact on the real estate market.”

He himself used to pay €1,500 for his apartment. Then the landlord said the rent was rising to €2,000.

The young father said he was “very lucky” to find another apartment within his budget, considering “more than 60 people” had applied for it.

‘Way too much!'

Rent in Limassol has surged by 23 percent in a single year, according to Ask Wire, a Cypriot real estate market analytics startup.

By comparison, it says rent in Nicosia went up 14 percent.

According to Marios Constantinou, head of property agency QuickLets, that increase has attracted “investors from Israel, who consider Cyprus a very good investment opportunity.”

The inflow has also caused a surge in sale prices.

“We've seen a lot of apartments being constructed to be sold for around half a million to €700,000,” Pavlos Loizou, founder of Ask Wire, told AFP.

He points on a map to an apartment in downtown Limassol: €475,000 for 100 square meters.

“That's way too much!” Loizou said.

Behind such big-money projects are often foreign investors, “notably Israelis,” he said.

However, this “triangle” of “foreigners selling to foreigners, to develop and sell or rent to foreigners” is nothing new, according to Loizou.

Since 2008, developers have barrelled through the island, transforming the Limassol skyline into tower blocks and luxury homes, making it the most modern-looking of Cypriot cities.

The island's bloated banks granted developers huge loans without hesitation; a trend that helped push the country to the brink of financial collapse in 2013 following a crisis in neighbouring Greece.

“The economic system now is stronger, but it's still dangerous when foreigners take your country for a financial playground,” Constantinou said.

According to real estate expert Antonis Loizou, 4,123 properties in Cyprus were sold to foreigners in 2022, up from 2,432 in 2020.

Social housing

Before it was scrapped in 2020, Cyprus' “golden passport” scheme granted citizenship to thousands of foreign investors – many of them from Russia – in exchange for a €2.5 million investment, often a residential property.

The scheme has been disbanded for years, but not before it mired the country's political leaders in controversy and left an indelible mark on Limassol's housing market.

A $5 million listing of one such residence is set to earn a hefty commission for Florent Gastine, a French real estate agent who traded his life on the French Riviera for Limassol's “booming” market.

Limassol Mayor

Mayor Nicos Nicolaides says he doesn't want Limassol to be home only to white-collar workers

With a sea view, marble kitchen, and a gigantic swimming pool, the same Russian-speaking owner is offering another apartment for rent at €18,000 a month.

“This is the market price,” Gastine told AFP, explaining that the end of the golden passports scheme created a domino effect. Developers built fewer luxury units, which “pushed prices up.”

The only solution, according to Limassol Mayor Nicolaides, is to build social housing.

“We don't want Limassol to become a city where only white-collar workers can live,” he told AFP.

“For Cypriots, it's heart-breaking to think that they can't live where they were born.”

Source https://www.news.cyprus-property-buyers … d=00167199

in the Cyprus coastal town of Limassol are now an endangered species as demand has outstripped supply with prices rocketing compared to previous years, pricing Cypriots out of the market.

The demand comes mainly from Ukrainians seeking sanctuary from Vladimir Putin's war in their country and also Russians who are leaving their country.

(Eurostat reports that in February 2023, Cyprus had the highest ratio of Ukrainian citizens granted temporary protection per thousand people at 1.1, followed by Czechia at 0.9.)

Speaking to the Greek language Phileleftheros the president of the Cyprus Property Valuers Association, Polis Kourousides, said available apartments are now an endangered species as their prices have tripled compared to previous years.

As Cypriots are paid considerably less than Ukrainians and Russians, they cannot afford to pay the exorbitant rents demanded leaving foreigners to grab what's available.

Mr Kourousides doesn't envisage a fall in apartment prices in Limassol for at least a year as new buildings and construction projects have yet to be completed. He said that “If the high demand in Limassol is not met with new buildings and newly built apartments to meet housing needs, apartment prices will increase even more.”

In addition to the rapid increases in apartment prices, there is also a large demand for property in Limassol, Larnaca and Paphos, which is mainly being driven by foreigners. There has been a great deal of interest by Israelis, who prefer to buy in Larnaca and Limassol, while Paphos is also showing strong interest from Britons.

Mr Kourousides noted that Britons tend to invest in smaller resale house in Paphos, while Ukrainians and Russians tend to buy or rent more expensive luxury houses and apartments. Israelis, on the other hand, tend to invest in land and build property. But a portion of them choose to buy homes in less densely populated areas of Limassol such as Germasogeia and Agios Tychonas.

Source. https://www.news.cyprus-property-buyers … d=00167265

Numerous foreclosure sales expected

According to CBC data, credit acquisition companies managed 80,192 loans with a total contractual balance of €19.2 billion at the end of 2021.

Approximately 6,000 foreclosure sales per year are anticipated to take place in 2023 and 2024 due to the large number of properties that have accumulated that need to be disposed.

The COVID-19 pandemic and the subsequent suspension of divestments since 2020 have led to the creation of a considerable volume of properties for disposal that banks and credit purchase companies have on their balance sheets.

The credit purchase companies, in particular, are now managing the largest volume of non-performing loans, most of which are linked to real estate.

The borrowers have two options: either find a compromise solution and resume servicing their problem loans or let the banks and credit purchasing companies proceed with the liquidation-auction sales of the real estate linked to these problem loans.

Insiders predict that around 6,000 divestment procedures per year will take place in 2023 and 2024.

While the two major banks have a low percentage of problem loans on their balance sheets (around 3-4%), which is acceptable to European supervisors, smaller Cypriot banks have higher percentages. However, the absolute numbers of problem loans are not too concerning due to their small balance sheets.

As documented by the Central Bank of Cyprus, while addressing NPLs through instruments such as the sale of loans to Credit Acquisition Companies (CACs) has helped to correct the balance sheets of some credit institutions, these loans remain part of the private debt of the non-financial sector and continue to pose a challenge to the real economy.

Most of the properties that are now being auctioned off are those of the companies that bought loans from the banks over the last five years and set up companies on the island.

Regarding divestments, data recorded through electronic auctions shows that in 2020, there were 1,450 auctions.

The number increased to 3,000 sales in 2021 and reached 4,000 in 2022. Of these sales, 60% were for fields, 20% for apartments, 10% for land, and 5-8% for residential properties. In single-digit percentages, residential properties with shops, fields with buildings, shops, with empty residential properties, and land with buildings were also sold. However, only 10-15% of these sales were completed.

Over 80,000 loans

According to data from the Central Bank of Cyprus, the end of 2021 saw over 80,000 loans being managed by ECAs, with a maximum contractual balance of €19.2 billion. This figure does not include the €700 million worth of loans sold by Hellenic Bank to Pimco and Themis. If these are included, the total amount rises to €20 billion of loans held by credit purchasing companies.

However, the sector is highly concentrated, with the three largest Credit Acquisition Companies holding 80% of the total loans by value.

The loan portfolio breakdown shows that 50% of the total contractual balance of loans was in loans to individuals, 47% was in loans to non-financial corporations, and 3% was in other loans.

The value of collateral as a percentage of the loan portfolio was 52%, with primary residences accounting for 32% of total collateral and other real estate for 65%. Approximately 3% of the collateral was other.

The CBC notes that ECAs own a significant number of properties, acquired through the purchase of credit institutions' portfolios or debt-to-property swaps between ECAs and borrowers.

5,679 properties in 2021

At the end of 2021, Credit Acquisition Companies (CACs) managed 5,679 properties worth a total of €978 million, with this number expected to grow in 2023 with the purchase of more loans.

According to data from the Central Bank of Cyprus, most of the properties held by CACs were residential plots, making up 29% of total properties as of December 31, 2021. Residential units accounted for 22%, followed by farmland at 21%, other properties at 19%, commercial properties at 7%, and commercial land at 2%.

CACs acquired 3,626 properties worth €584 million and sold 1,946 properties worth €320 million in 2021, either as part of the purchase of credit institutions' portfolios or through debt-for-property swaps.

However, the rate of disposal is slower than the rate of acquisition, leading to a further accumulation of real estate on the balance sheets of the CACs.

In 2021, 1,503 properties with a total value of €248 million were acquired through the property divestment process, while 2,123 properties with a total value of €336 million were acquired through debt-for-property swaps.

Link to real estate

According to the Financial Stability Report, banks in Cyprus have a considerable amount of exposure to loans secured by real estate, which made up 59.7% of their total loan portfolio at the end of 2021, an increase from 58.8% in 2020.

At the same time, loans to households secured by residential real estate amounted to €8.1 billion, accounting for 29.8% of the total loan portfolio, a decrease from €8.8 billion and 30.3% at the end of 2020.

On the other hand, loans to non-financial corporations secured by commercial real estate amounted to €8.1 billion or 29.8% of the total loan portfolio, slightly down from €8.3 billion and 28.5% at the end of 2020.

Notably, as of the end of 2021, the loans to households were primarily related to the purchase of real estate, with 76.8% of them secured by residential real estate. Meanwhile, loans to non-financial corporations secured by commercial real estate represented 55.8% of all loans to non-financial corporations.

Source Cyprus Property News

Legal Matters Cyprus' swimming pool saga continues

Cyprus' long running swimming pool saga made headlines in the Cyprus Mail yesterday in an article “Swimming pool law damaging Cyprus property and tourism” by Beejay Browne.

Beejay reported that the Cyprus tourism and property market are being damaged by outdated and unworkable laws governing swimming pools, which have seen many complexes closing theirs over the last few years.

But the problem has worsened as it seems that privately-owned villas offered to holiday makers on Airbnb other online platforms are next to be targeted.

The problem is that under the provisions of present law, swimming pools that are shared by more than one family are considered as public swimming pools and must therefore comply with strict regulations including the provision of a lifeguard, separate male and female toilets, showers and footbaths.

As a consequence, those who have bought an apartment or a property in any other development with a shared swimming pool have to pay a significantly more in communal charges than those in complexes without pools. This makes buying a property in a complex with a shared swimming pool a much less attractive proposition.

This is how the Cyprus law relating to swimming pools currently stands:

Cyprus Law N.55(I)/92 paragraph 2 states that the term ‘public swimming pool' also includes the swimming pools of buildings which are used by the owners of the units or their tenants.

Regulation Number 368/96 paragraph 47 (1) states that all the employees relating to the swimming pool have to obtain a health certificate, to be clean and to behave properly.

Regulation Number 368/96 paragraph 47(2) states that all the trained supervisors will be on duty during the operation and the use of the swimming pool. Their number is determined in accordance with the size of the swimming pool and the number of the persons usually using the swimming pool.

Regulation Number 368/96 paragraph 47 (2)(a)(i) states that for small swimming pools at least one trained supervisor is necessary to be appointed.

Regulation Number 368/96 Part VII paragraph 53 states that a license is needed for the operation of a swimming pool by applying to the relevant authority. The last decision is made by the Minister.

The swimming pool saga to date

In November 2005 Lakis Tofarides, the then Chairman of the Land and Building Developers Association, suggested the following measures should be taken to alleviate the situation.

“The swimming pools in apartment buildings and complexes to be considered private (not public) because the residents and their guests use them. At the same time, residents, in proportion to the number of persons living on the building/complex, could be trained as lifeguards. This means that if there are large families on the building, the number of persons to be trained would be decided accordingly”.

“As far as public pools are concerned, the number of supervisory staff needed (lifeguards, etc.) should be reduced”.

In June 2007, Denis O'Hare, Linda LeBlanc and I met with the Permanent Secretary of the Interior Ministry, Dr Lazaros Savvides, and discussed the problems of the swimming pool laws with him.

In August 2008 it was reported that the Cyprus Government was looking to change the swimming pool laws. However, this was yet another vacuous announcement.

In September 2008 the European Committee for Standardization approved two standards relating to swimming pools:

EN 15288-1: 2008 Swimming pools – Part 1: Safety Requirements for Swimming Pool Design (English)

EN 15288-2: 2008 Swimming pools – Part 2: Safety Requirements for Swimming Pool Operation (English)

Under these European Standards, which Cyprus should have adopted by March 2009, complexes that share a pool for the use of the property owners, their families and guests are classed as a Type 3 swimming pool, making it subject to different standards than a public swimming pool and would therefore not require lifeguards, etc.

The standard defines ‘public' pools as “open to everyone or to a defined group of users, not designated solely for the owner's/proprietor's/operator's family and guests independently from paying an entrance fee.”

In 2011 Arlene McCarthy MEP questioned Cyprus swimming pool legal rulings in the European Commission after Paphos municipality took legal action against one of her constituents and others for not having a swimming pool licence for the pool in their holiday complex.

In 2012 a group of residents living at a complex in Kato Paphos had their passports confiscated temporarily for failing to comply with swimming pool regulations.

In January 2015 Phileleftheros reported that Interior Ministry is proposing a new law that would classify swimming pools into five different categories. A main concern is to ensure proper regulation to prevent accidental drownings.

The law will make a distinction between public and private swimming pools, and each category will have its own criteria for construction, operation and inspection.

In December 2016 Phileleftheros reported that an announcement from the Interior Ministry advised that a bill to amend the existing legal framework and regulation of swimming pools has been drafted and forwarded to the Attorney General for legal vetting.

However, during the vetting process it was identified that some of the provisions in the draft bill already existed the Streets and Buildings Law and Regulations; as a consequence, the draft bill was returned to the Interior Ministry for further work.

According to the ministry's announcement, two pieces of legislation will cover:

Issues concerning the design and construction of public and private swimming pools will be included in the relevant legislation under the Streets and Buildings law. (A working document will shortly be issued for public consultation.)

Matters relating to the licensing of swimming pools will be included in separate legislation.

In 2018 a petition was launched calling on the Minister of Interior to change the law. However, the petition has yet to garner the 8,000 signatures required to get it before parliament.

Perhaps the government's reluctance to make common-sense changes to the law is due to politically powerful individuals and/or organisations with vested interests putting pressure on government to maintain the status quo?

Source Cyprus Property News

Surely developers must have some input on their concerns...... as they are still building complexes consisting of apartments villas and townhouses which are in some way legally linked to communal pools.... And this current law could impact on those owners even if individual properties such as a villa or townhouse has their own but is incorporated into a complex with a communal pool...

They ve been building these properties for decades how is it nobody has been questioned about the legality of the pools they built........ Let me guess ?????

Why prices are not coming down anytime soon

Cyprus property prices and rents will not fall soon

Cyprus has been attracting foreigners for tourism, real estate, and business purposes for the past 30 years. This has brought in significant amounts of money into the economy, transferred expertise to locals, and boosted businesses with more affluent clients.

However, since the Russia-Ukraine war broke out in early 2022, over 20,000 Ukrainians, Belarussians, and Russians have relocated to Cyprus, with many settling in Limassol to take advantage of the favourable tax regime. Fintech companies from the warring countries and neighbouring Belarus have also moved to Cyprus, bringing in new wealth and talent. Russian-language communications company Vestnik Kipra reported having 3,000 new IT professionals on its roster in May 2022 with some of their employees earning more than €5,000/month. The Limassol mayor estimated over 10,000 Ukrainians moving to the city since the war.

The “headquartering initiative” by the Cypriot government has also attracted overseas companies to set up operations on the island, resulting in 4,524 families applying for relocation up to August 2022.

Additionally, Israel's recent political changes have prompted a surge of inquiries for emigration from its citizens, with Ocean Relocation receiving over 100 per day since January 2022. Cyprus has also been a popular destination for Israelis, with around 10,000 applying for Cypriot residency since 2020.

Information International has reported that around 12,000 Lebanese have also come to Cyprus, with a majority being between 25 and 40 years old.

These developments have brought new challenges and opportunities to Cyprus and its residents.

The influx of migrants to Cyprus has led to a surge in demand for rental accommodation, particularly in popular destinations such as Limassol and Paphos. Many of these migrants, have a much higher salary than the average local worker, some times more than 5 times the average salary of a local blue-collar worker. As a result, paying €1,500 for rent is not a problem for these high-earning migrants.

The surge in demand for housing, combined with the high salaries of these migrants, has led to a significant increase in rent prices in Limassol and Paphos. In 2016, it was possible to rent a two-bedroom apartment in Paphos for around €300 and in Limassol for around €400 per month. Now, the minimum rent for a two-bedroom apartment in Paphos is €1,000 and in Limassol can exceed €1,400 per month. This means that many locals are finding themselves priced out of the market, especially in the more desirable areas of the island.

The surge in rental prices has had a direct effect on the sales market, as foreign investors seek to purchase properties that yield a return of approximately 6%. The rental income generated by a property is a key factor in determining its value, as investors are willing to pay more for apartments that can be rented out for higher amounts. For instance, if an apartment can be rented for €1,000 per month, investors are willing to pay up to €200,000 to purchase it. However, if the same apartment can only be rented for €500 per month, the investor is only willing to pay up to €100,000 for it. This highlights the close correlation between rental prices and sale prices in the real estate market.

The individuals who have recently relocated to Cyprus and are currently working online or in fintech companies, have not only invested their time and effort in establishing themselves in the country but have also made substantial investments in the local real estate market.

This means that they are likely to stay in Cyprus for the long term, and will not be quick to leave. As a result, if there is no intervention from the government, it is unlikely that property prices will decrease significantly in the near future. The government may need to implement certain measures to regulate the real estate market and prevent it from becoming overheated, such as imposing more limits on foreign investment or introducing incentives to encourage investment in other sectors of the economy. However, until such measures are put in place, it is expected that the real estate market in Cyprus will remain stable, with prices continuing to reflect the demand from both domestic and international buyers.

About the author

Christos Nikolaou

Licensed Real Estate Agent

Property Canvas (Registered & Licensed Estate Agency A.A.826 & A.M. 432/E)

Source Cyprus Property News