We are impressed by the younger generation of Cypriots, who, in addition to their qualifications and some partial practical local experience of real estate, have based their research and analysis of their computer data on their own investigation mainly.
We attended a seminar and gave a “lecture” on the local market and returns, we were the only ones to touch upon the local real estate market situation and how real estate returns adopted locally are based differently than those of the international market.
So, we have a “professional” computer-based data on the one hand and another on the real situation as it appears in the Cyprus real estate market.
An interesting analysis was produced on how foreign investment funds looked at Cyprus and their experiences of other countries regarding NPLs and how these affect our own market.
We would have liked more practical experience by those worthy speakers with relation to local behaviour, as the locals seem to be attached to their real estate investments with their own peculiarities.
We would have liked to listen how the foreign investment funds deal with our ownership structure, including the lack of titles/delays, the time-consuming building permit issue, shared ownership, the statutory tenant issue/evictions, the non-payment of common expenses.
Notwithstanding the above seminar’s success (in terms of the number of attendants and speaker’s quality) seminars which take more than 3-4 hours become tiring with attendants leaving/rotating their presence, this was a drawback.
Real estate is a business where new technology is the future with one speaker suggesting that we will buy shortly real estate through our mobile phone (quite right).
Things are changing, those who are left behind will see reduced demand/profitability of their business.
There is an opportunity for young and smart people who would like to follow the business of real estate in Cyprus using their computer skills.
As circumstances are at the moment with negative deposit rates, the uncertain future of some banks, the reasonable returns in real estate and the new model of business by banks and investment funds, create a new source of demand for this type of investment.
There are so many things going on, especially the opportunity to explore the possibility of local small-scale real estate funds, is a development not to be missed.
Ideally, a computer literate person should sit down and examine the individual website offers, as well as those of private individuals, with local estate agents and valuers and choose those properties that might appeal to their potential clients.
Smart advertising and promotion are equally important as the follow up of such promotions and their analysis to ascertain where the market is going, what are the local budgets and based on the results, to direct their promoted product to targeted individuals and firms who have the funds.
A major issue which comes up constantly is the non-exclusivity agreements for sales between agents and sellers. Agents promote a property only to find out that potential buyers go directly to the seller, or even worse other agents noticing an opportunity, direct their clients again to the owner under-cutting commissions.
In a very recent sale by one agent, having reached a final price and the buyer paid a reservation fee, another agent finding the property from the first agent’s website, went directly to the seller and made a higher bid.
Without giving a second thought, the seller accepted the higher price, now the seller might most likely be sued by the first buyer and perhaps also the first agent.
Local lawyers being what they are, would like to get their hands on the action, whereas the initial buyers will most likely not bother, bearing in mind justice delays.
This sort of thing does not happen a lot in other countries (in the U.K. it is called gazumping) so, it is difficult to base a strategy on.
Another scam in real estate is a property offered as a result of foreclosure, being rented by the owner to reduce its value. Since the initial owner has the first option to buy, they can buy the property back at a much-reduced price or even get friends to buy it. Such scams are encouraged by a complex and extremely slow justice system in tackling property issues.
There are some recent practical issues that we meet quite often in Cyprus, making the operation of the market difficult, leaving unhappy buyers most of the time.
The whole story is not told through statistics in the real estate market, local, as well as practical experience is required.
P.S. The abolition of Cyprus passports to foreign investors is a big issue on how the market will develop.
We predict for some types of property, the new situation will cause a depression in the high-end market, if the government does not come up with an alternative scheme, the situation will worsen.