The association met with Troika technocrats to present their estimations regarding the course of the real estate market and the problems faced. “What the Troika agrees upon is that if we want to restart the economy, the real estate sector must be supported. They see an important improvement of the situation in 2014 in terms of real estate,” Leptos said after the meeting. Commenting on the Troika’s optimistic prediction, Leptos noted that there have been new investments from abroad worth €500 million over the last year. “These are fresh investments and money that the economy needed and the Troika acknowledges that these investments were made at the most difficult point in the last decades. So these are positive things and there is more that we can do,” he added.

The chairman of the association also noted that “Pimco has miscalculated real estate prices in its predictions and the Troika agrees that we will not see such predictions verified in Cyprus”. This view is also shared by the chairman of the International Real Estate Federation (FIABCI) Lakis Tofarides who refuted Pimco’s bank stress test estimations and pointed out that such price reductions would only become a reality in the case of mass property repossessions. “I do not expect that there will be mass repossessions tomorrow. I do not expect this because it would bring destruction to the banking sector itself and by extension the country’s economy,” Tofarides said. However, the FIABCI chairman noted that property prices have reached their lowest point taking into consideration the development cost of a new home compared to those sold. Real estate sales have been reduced by 60% while sales to foreigners have reached more than €500m. 

Leptos outlined the association’s suggestions to help kick-start the sector including the abolition of transfer fees, reduction of capital gains tax in case of reinvestment, reduction of bureaucracy and speeding up the issuance of title deeds. With regard to repossessions, he said that since Cyprus is in an emergency situation, people should not be expected to live up to their obligations as normal, noting that “adequate time should be given to allow the Cypriot economy to return to normalcy”.

Source: InCyprus