Properties of £1bn changed hands in 6 months
Properties of £1 billion have changed hands in the first half of the year in Cyprus. The Land Register Department figures show the strong activity in the property and construction sector and lead to estimates for a slowdown in the next few months.
According to the figures, the total value of property selling was shot to £1 billion against £786 million in the corresponding period of 2006 (+28%). According to historic data, the voluntary sale of properties in the first half of 2005, 2004 and 2003 had a total value of £442 million, £626 million and £411 million respectively.
Property market sources support that this increase is linked to the upcoming imposition of VAT, as many developers and individuals rushed to buy land.
According to Chairman of Real Estate Agents Association of Cyprus, Solomon Kourouklides, the increased voluntary sales are also attributable to the increased liquidity of profits of the developers and the liquidity of the banks, which has contributed to the rapid credit expansion. “The banks’ liquidity creates a strong competition in the allocation of housing loans”, he said.
In July, the Central Bank raised the lending rate for investments in properties in order to stop the increase in loans. In June, the increase had exceeded 20%.
“We expect that the upward trend on properties will continue in the next few months. The growth rate, however, will slow down”, Vice Chairman of Cyprus Property Valuators Association, Charalambos Petrides stated.
It is worth noting that the state revenues from the capital gains tax paid on the goodwill of the sold properties increased sharply in the first half of the year by 173.8% or £80.2 million to £126.3 million compared to £46.2 million in the corresponding period of 2006 and £23.5 million in 2005.
First Published: 23/08/2007 by Stockwatch