Cyprus Central Bank Warns Against Mass Property Selloffs

FILE - People enter the entrance of the Cyprus central bank building in capital Nicosia, Cyprus, Thursday, March 28, 2019. (AP Photo/Petros Karadjias)

NICOSIA – ,The Central Bank of Cyprus (CBC) told commercial banks to shy away from the wholesale selling of mortgaged properties because it could lead to a sudden drop in real estate prices that have been driven up by foreign investors wanting to buy Golden Visas that come with European Union passports.

“Mass selling of properties could lead to a sudden drop in real estate values, thus creating a negative interactivity between the real economy and the banking sector,” the CBC warned in a report on financial stability posted on its web site, the Chinese news agency Xinhua said.

The central bank said that during 2018 the real estate market continued a gradual recovery thanks to the growth of the economy, driven largely by record tourism results, and the improvement in the real estate sector.

The prices of properties had contracted as much as 30 percent after the 2013 crisis when President Nicos Anastasiades got a 10-billion euro ($11.25 billion) international bailout to keep banks from going under after they suffered big losses in their holdings in devalued Greek bonds and bad loans to Greek businesses who didn’t pay back.

The report said the property prices started jumping in 2017 with an increase in demand of apartments by local buyers and luxury housing by wealthy foreigners, despite criticism the government wasn’t vetting them for money laundering or criminal activity.

Purchase deals submitted to the Land Registry Department during 2018 showed a yearly increase of 5.8 percent, the report added. Investment by non-Cypriot buyers represented 47.3 percent of registered purchase deals, of which 15.5 percent came from EU nationals and 31.8 percent from nationals of countries outside EU, said the news agency, with Chinese big investors in the European Union.

“The rise in real estate prices and particularly of apartments in some areas of Limassol district reflects extensive large infrastructure projects development and demand for high-value residence housing by non-Cypriots in the context of the Cypriot Investment Program,” the report said.

“Investment through the Cyprus Investment Program seem to have an indirect rising effect on real estate prices, and most notably on the prices of apartments, especially in sea-side areas of Limassol district,” the report added.

1 Comment

  1. If I was .. these bankers ..I would begin providing discounted mortagaes and points for purchasing property in Cyprus..right now!

    As soon as it becomes official that Anastasiades is going to turn the pristene waters of Cyprus, into oil producing factories ..which are banned in the Coastal states of the Atlantic and Pacific ocean because of the plolution from the daily oil spills and leakage into the waters, and the threat of massive oil accidents from explosions, sabotage , weather events ..and simply operating consequences which will threaten the pristene beaches, fishing industry, tourist business , hotels , restaurants ..and everyday livelihood of the people of Cyprus… no one will be looking to buy any ocean front properties , condominiums, or coastal resorts in Cyprus!

    I know I have looked with my wife in buying property and homes in the Greek Islands…and on the recommendation of my Greek Cypriots friends.was seriously looking into Cyprus!

    Not going to happen…I am not interested in swimming or fishing in waters with oil residue, or eating fish tainted with oil ,and I mean not olive oil .or watching a parade of Nato battleships representing Exon Mobil and Total, and waiting for what happened to the louisiana and Texas coastline in 2010 which was decimated by just one oil rig ..and resulted in damage of 29 billion dollars and still trying to recover !

    Have the people of Cyprus been notified by Athanastasides to the consequence of his actions?

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