RUSSIANS to the rescue of the property market? Real estate agents are keeping their fingers crossed although foreign buyers shouldnt be expected to bail out the economy all on their own.
According to Chris Hajikyriacou, sales director with BuySell, around 60 per cent of their sales this year are done with Russians and the trend is expected to close out the year.
Its a welcome change for the property market which has stalled following the fallout from the global credit crunch. British buyers, once coming to the island in droves, dont have the cash these days. The moneys elsewhere.
By some estimates, property sales are down 80 per cent over the last couple of years, but the invading Russkies could yet save the day.
While were not experiencing great sales like in the boom times, the Russian market has given us a kick-start, says Hajikyriacou. Were it not for them, wed be in big trouble.
It seems theyve got a lot of excess cash now, the Russian economy is doing quite well compared to others.
The bulk of sales (about 75 per cent) is concentrated in Limassol, but Paphos is coming back in a big way.
This was confirmed by Fitzgerald Prestige Properties, which said it expects Russian buyers in Paphos to double this year, due to the influx of visitors, many of whom will be looking for property investment opportunities.
During the month of March, Fitzgeralds said, their property marketing saw a substantial increase in inquiries from Russian clients. It said most of these buyers are professional or business people.
BuySells Hajikyriacou said seafront property in the Coral Bay area was becoming very popular with Russians, some of whom were looking to get out of the heavily built-up areas of Limassol.
Polis too, he added. And I hear the Anassa Hotel is fully booked up by Russian holidaymakers this summer. Theyve even had to revamp some of the rooms to accommodate the demand for suites.
But not all the buyers are loaded, cigar-chomping Slavs: You get all kinds of people, all budgets. From a 70k one-bedroom apartment to a 4 million villa. And usually the Russians arent into speculating, theyre real buyers.
But theres more to it than hard cash. Making it easier for Russian nationals to obtain visas and purchase property has begun paying dividends.
And despite restrictions on foreign buyers for one residence only, enterprising lawyers have found a way around this a property may be purchased in the name of a company.
So one residence is registered to an individual, a second to the company. A lot of Russians are buying up two, even three properties now.
Despite this, a lot needs to be done to reboot the stalled market. Over the last two years alone theres been a 30 per cent drop in prices up to 40 per cent for apartments.
Hajikyriacou cited one study that found there are some 1.5 million apartments currently available.
In one case, a man had bought a flat in Peyeia for 110,000, and was now putting it on the market for almost half that price and fully furnished.
But to truly jumpstart the property sector, Hajikyriacou said, the government needs to get is act together, introduce incentives and cut red tape: bring tax deductions for the first residences, slash property tax, and last but not least settle the title deeds shambles.
Take Paphos. All the roads are dug up, the Paphos-Polis road is not happening yet, no marina to attract investment, it’s a mess.
