Troika Forecasts The Recovery Of The Cyprus Property Market
News Posted On: 13 February 2014
The LBDA (Land and Building Developers Association) of Cyprus and its chairman claim that the Troika has anticipated a recovery of the Mediterranean nation’s real estate market this year. Pantelis Leptos, the man who chairs the Land and Building Developers Association of Cyprus expects the real estate market to start recording positive performances in 2014.
Technocrats from the Troika met with members of the LBDA in the first week of February 2014 to report their estimations of the property market in Cyprus along with the problems it faces.
After the meeting ended, Leptos answered some questions posed by the media. One such question was “What can be expected from the country’s real estate market for 2014?” Leptos answered saying that the Troika and the Cypriot government were in agreement that the economy must be restarted to support the real estate industry. He revealed that the Troika expects the property market to pick up this year and help the economy achieve sustainability.
Reasons for the Troika’s positive outlook
Troika’s positive prediction for Cyprus’ property market has reasons. According to Leptos, the country has experienced an influx of foreign investment over the past year. In fact, Leptos stated that more than 500 million euros have been invested in the Cypriot property market in 2013.
He said that these investments are fresh and have offered some much needed funds to the economy. Troika has acknowledged the fact that investors have spent their money on Cyprus at a time when the economic climate is said to be at its worst in many decades. As a result, there is little doubt that these investments are positive for the economy.
Leptos also said that property prices calculated by Pimco were wrong and that the company’s predictions are not verified by the government. Lakis Tofarides is another prominent Cypriot figure who agrees with Leptos. The FIABCI (International Real Estate Federation) Chairman also refuted the bank stress test estimations carried out by Pimco.
He says that such reductions in prices would only be possible if property repossessions happened in bulk. Tofarides jokes saying that he does not forecast mass repossessions tomorrow, or the day after. He justified his claims by adding that if such a thing were to happen, the banking industry in Cyprus would collapse and put the nation in further distress.
Kick-starting the economy
The chairman of FIABCI also noted that property prices in the country are currently at their lowest point after considering the costs related to construction of new properties in comparison to the ones sold. Property sales have gone down by 60 per cent while 500 million euros have been invested in the market by foreigners.
The association headed by Leptos believes that the sector could be kick-started by abolishing transfer fees, lowering capital gains tax when it comes to reinvestment, increasing the rate at which title deeds are issued, and lowering bureaucracy. If these measures are implemented quickly, Leptos believes that the property sector in Cyprus could be up and running by the end of 2014.
Written by Les Calvert
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