COVID19: Local buyers in real estate picking up

3 mins read

By Marinos Kineyirou

Cyprus government measures to subsidise mortgages, in a bid to support the COVID-19 struck economy, seem to be paying off, as young couples are exhibiting an ever-growing interest in apartments or houses.

The Plan, which only covers loans for homes and therefore covers the purchase or the construction of a first residence (part of the loan will be used for purchasing the plot), has mobilised interested parties who see it as an opportunity to finally purchase a home.

It also presents a very good opportunity for Cypriot investors who found it difficult to get a loan or felt uncertain over repayment of their loan, as it covers loans worth up to €300,000 with a maximum interest rate of 2.3%, covering up to 1.5% of the interest rate for four years.

For property prices, it may be too early for predictions, as the support measures that have been implemented do not seem to be pushing prices downwards.

However, this has more to do with agreements between the seller and the buyer.

Certainly, real estate agents will be pressured to ensure the best possible price, while people are also hunting for houses that are in the initial stage of construction or somewhere in the middle with a delivery date within a few months.

The supply of real estate does not seem to have been significantly affected, but the delivery of some projects is likely to be delayed due to the suspension of work due to Covid-19.

The Government is set to approve two targeted interventions to support development, by extending urban incentives and granting new facilities to citizens.

In addition to the already approved plans, the Council of Ministers proceeded on 25 June, with targeted interventions.

  1. Urban Incentive Plan

Measures for Legalising and Licensing of Arbitrary / New Constructions in already Approved Developments. The Council of Ministers, during its meeting on 5.02.2020, approved the extension of the above Plan, until 31.12.2021, which has already benefited some 1454 applicants.

  1. Urban Incentives facilitating Recovery of Tourism Industry
    Additionally, the Council of Ministers, during its session on 29.04.2020, approved the extension of the above Plan, until 31.12.2021, which gives the possibility of maintaining the Building Coefficient of an old hotel unit, if it is demolished to make way for the construction of a new one.
  2. Urban Incentives for Recovery of Development Activity

The Interior Ministry, evaluated the results of the Urban Incentive Plan, given that from its initial implementation on 29/5/2013, 840 applications for building permits have been submitted, with 571 approved.

Due to epidemiological data on the coronavirus outbreak, which severely affected all sectors of the economy, considers that the period of validity of the Plan Incentive provision should be extended until 31/12/2021.

The new Proposal includes payment of an additional compensatory fee of 5% in case the applicant fails to apply for a building permit within one year, after securing planning permission.

In this way, incentives are provided for faster implementation of the project.

  1. Extensions of Planning Permits and Building Permits
    The Interior Ministry, having in mind the consequences suffered by the construction sector as a direct result of the exceptional restrictive measures taken during the pandemic, considers that the special circumstances of this period resemble reasons of force majeure or special conditions.

To adapt the procedures of development licensing in a way to encourage a favourable climate for recovery, the Interior Ministry tabled a proposal before the Council of Ministers for the extension of urban and building permits which expired during the period from 30.06.2020 with their validity automatically extended until 31.12.2020. This proposal was also approved.

The requirement for citizens to provide evidence is abolished
Also in the context of the government’s policy for the abolition of the requirement for citizens to provide evidence for information that is already in the possession of public services, the Interior Ministry announced that as of July 13:

– The obligation of the citizens to attach to the submitted applications to the various Departments of the Ministry of Interior (e.g. Land Registry, Urban Planning, District Administrations), a copy of the title deed or real estate research certificate is abolished.

– Also, in the cases of applications for real estate development, the submission of an official copy of the real estate plan will not be required.

-Additionally, in cases where an official land survey is required, issued by the Land registry, this is now being replaced by an informal plan that can be printed from the DLS Portal of the Land Registry.”

All of these measures, I believe, strengthen both the growth and the demand in the real estate market, while the first signs of economic recovery are expected by the end of the year.

The writer is President of the Council for Registration of Real Estate Agents