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We have suggested how our embassies could attract foreign investments in Cyprus, now we will touch upon the unexplored wealth recorded by the Land Registry, with very limited analysis on activity in the real estate market.
Some analysis of the transactions are prepared by the auditors KPMG and PWC (as well as others) but even those who carry out such analysis have limited data to go by.
If we are to start with foreign sales in real estate, these transactions, are recorded in the number of sales and not together with the value of the sales.
So, whereas the registered sales in terms of numbers to the foreign market are around 40%-50% of the total number of transactions, in terms of value it could be 60%-70% of the total (see the tower sales, hotels, beach land etc).
No one knows and since the data is there we suggest that in addition to the number, the values of these sales should also be recorded giving a clearer picture of foreign demand in the Cyprus real estate market (who are the foreigners doing the purchases). Based on the Land Registry, locals are considered to be the Cypriots, as well as all E.U. members.
Purchases by British and other E.U. nationals are not differentiated and in fact, this broad classification (Cyprus + E.U.) is not analyzed both in terms of volume and value per country.
Similarly, the foreign buyers (non-E.U. members) are not classified as such as we do not know where the sales come from or the acquisition value.
This is of major importance since if such statistics existed, we, the local real estate market could ascertain which countries to target and by projection direct one’s marketing and promotion at these countries.
If one then goes a step forward numerous acquisitions are concluded through local companies they should also be analyzed.
In a simple questionnaire to be filled in by all buyers could ask why they invested in Cyprus and what they considered as being the minuses and pluses for such demand and this could provide value-added information.
We do appreciate that the Land Registry will say “we do not have the staff, the expertise and the work involved is time-consuming to enter into such a statistical analysis”.
The work of analyzing this data could be reduced if the department collaborates with the Statistics Department, the Central Bank and the Ministry of Commerce.
If we are to encourage such a statistical information and be it that it might cost around €300,000 p.a., the value of such information will be a multiple of such a cost (it will surpass the cost at least 10 times, saving time and money and provide correct information to the Cyprus real estate market, as well as the Government).
Let’s look at one crucial example of how we are “blinded” by the lack of statistics. The U.K. is leaving the E.U. and the question is what effect it will have on this market.
No one knows, without analysis, it is anyone’s guess, with opinions ranging from 10%-15% reduction of foreign demand (once it is clear what foreign demand is).
The Central Bank took a role (and well done) to prepare statistics on the price index and it’s a success. In addition to the Land Registry information is also provided by private firms. This particular cooperation could expand to include the above suggestions.
We have upcoming markets and for which we know little about e.g. Azerbaijan, Hong-Kong, Singapore and others with huge wealth with an expected demand that we could explore.
India is one of the countries to keep an eye on, as is a recent investment by an Afghan company that is concluding a deal to buy a local college!!
The Chinese are active, but one cannot be certain where the demand comes from (which regions and towns).
Information could come also from auditors/advocates/local agents, thus enriching the cold statistics by Governmental Departments with what is happening “on the ground”.
With small countries such as ours, anything is possible to achieve, but it requires a vision and not expect only the Land Registry to analyze such data.
We have this unexplored wealth and you would have thought that the first people to ask for these statistics would be the developers and investors, as well as the various consultants, who handle such foreign/local sales.
In the Yeltsin era, we had participated in exhibitions in Russia with our “leader” being the ex-Governor of the Cyprus Central Bank (Mr Afxentiou), leading a group of professionals and in addition to auditors/developers and people like us in the real estate sales/consulting.
Our group wore national dress, we had Cyprus delicacies and we had a Zorba-like dance. Our competitors (especially the Spanish) wondered why our Cyprus Business Booth had so many attendants!!
Ever since there has been no such leadership and everybody “does their own thing”.
Sitting back on the couch and expecting things to happen is no longer an option.
