Property prices and uncertainty about foreclosures are hampering large foreign investments in mature development projects according to would-be investors at the Cyprus Investors Summit.
IN THE AFTERMATH of the Cyprus Investors Summit, during which 18 projects of several major developers were presented, official bodies are cautiously optimistic that foreign investors will proceed with great deals in the next few months. But would-be investors representing large funds abroad and creditors of construction companies have a different opinion. Although investors weighed carefully the big advantages of Cyprus as an EU Member State, the tax system, the highly skilled workforce and the high quality of services, the list of negatives includes uncertainty in relation to the future property prices. In individual contacts with the heads of 18 development projects of the private sector and in their exploratory consultations with bankers and agents of the state and private sector, they said that the fact that property prices are tied to the distortion of the recent past is a negative element. Although prices have fallen, they are still well above 2002 levels. Based on official ECB data, residential property prices have dropped 29% since 2008 but still are 70% above 2002 prices. Some investors believe that prices are artificially maintained at these levels from the inability of banks to engage in asset sales. Moreover, the geopolitical and economic conditions, as they develop in the region with the uncertainty in Greece and the challenges of Ankara in the exclusive economic zone of Cyprus, create additional uncertainty in the investment environment. Under the weight of the above, the investment funds raise an incentives issue. In their interventions during the Cyprus Investors Summit, they wondered why the presentations were not accompanied by the provision of additional special incentives for investors who will reach an agreement. The government says through the competent bodies that it has already given a significant incentive to real estate investments, such as the extension of the urban planning coefficient from 5% – 7%. The Cypriot authorities note that if the agreements are reached, then the competent state departments will be able to give additional incentives. So far, however, none of the expressed interest in relation to the 18 mature development projects presented at the conference has been developed further, except the announcement of D. Zavos group of companies that it has reached an agreement to sell a plot of land to foreign investors from the Middle East. The plot, according to the announcement, is strategically located at the Limassol coastal road. No further details were given. The development projects presented at Cyprus Investors Summit are: Shacolas Emporium Park & Limni Bay, Pafilia Tower & Limassol Landmark, Arist Venus Rock & Eagle Pine, Tofarco Lord Byron Towers, Leptos Estates Neapolis Smart Eco City & Blue Marine, Santa Rosa Tower, Makronisos Marina at Ayia Napa, Nicosia City Mall, St. Elisabeth Golf Resort, Vasa Golf Resort, Makedonitissa Estates Project, Elea Estate and Del Mar, which is a consortium of Leptos Group and Zavos Pavilion Business Centre.
Read more at: http://www.news.cyprus-property-buyers.com/2015/02/13/property-deals-stumble-prices/id=0050397
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