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By Peter Stevenson MEMBERS of Volunteer Doctors Cyprus have treated around 350 people at their free clinic in Nicosia since it opened three months ago, while two more, one in Paphos and one in Polis are due to open today. Limassol also has a free clinic, which was opened only last month, and plans have been drawn ...
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SOME 10 days ago, foreign minister Ioannis Kasoulides raised expectations by announcing the possibility of a deal with Turkey for the opening of the fenced off area of Famagusta, for the return of its inhabitants. In exchange the Cyprus government would agree to the opening of Tymbou airport to direct flights. ...
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Cyprus Internet Directory [ Closing shop ]

Closing shop

Is it the end of the line for illegal estate agents operating on the island?

By Antonis Loizou, FRICS

FOLLOWING on from last week’s article regarding illegal estate agents, it appears that the end for most of them is coming near. The situation in the UK market, where most of these “agents” come from, is not so good at present despite the recent further reduction of interest rates (in the UK). This has led to a dampening of the market within the UK, which will have a direct and negative effect on home buying abroad, and, of course, Cyprus will be affected (our ever increasing costs in addition to VAT of 15 per cent on land transfers from July 1 will make the Cyprus market even more difficult). Already sales commissions from desperate and worrying developers have reached 10 per cent, whereas others offer in excess of 12 per cent (plus VAT), which is again added to the costs/sales price.

We estimate that this year will see a reduction in demand by approximately 20 per cent from the UK, and potential buyers will prefer to let for a period prior to committing to buy. For this reason, we expect a reduction in prices (not to a great extent, but, say, on average 10 per cent) in case of resales and from developers a greater eagerness to conclude, by offering discounts in the region of five to ten per cent.

Small scale and financially weak developers will feel the pinch, which will be aggravated by the new, stricter regulations on financing, introduced by the Central Bank, requiring a buyer’s contribution to be at least 40 per cent of the acquisition price, up from 20-25 per cent. This requirement has almost wiped out the buy to let market in Cyprus, since for this type of investors, the financial requirements does not fit. Continuing bad publicity about the lack of title deeds should also be considered. In a recent exhibition in Ireland, we (as an office) were commenting on the high crime of rate in Spain (approximately four times that of Cyprus) by comparison to Cyprus and the Spanish agents were reporting on the lack of titles in Cyprus!

In light of the above, we expect the illegal cowboys, who are mainly British, might last for another five to eight months before running into financial trouble, and some of them may end by closing shop. This will also affect, of course, many local estate agents. We will also see the bigger boys, with their huge overheads, finding that it may not be worth it anymore.

The Minister of Justice had promised to start closing down these illegal operators very soon, it is hoped that the new minister will certainly do so, it is worth his while as fees of illegal estate agents reach an estimated undeclared income of around £200 million per annum.

What is also strange is the lack of response to the amended Estate Agents Law, which was adopted in order to accommodate, to an extent, these illegal cowboys. The closing of the local and foreign illegal estate agents offices, despite our own/the industry’s loss, is a necessary corrective step, which will help the industry in the mid/long term.

n Antonis Loizou & Associates Ltd – Property Valuers & Property Consultants.,

(Source: Cyprus Mail)

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