When the world seems to be going crazy stay calm! The constant flux in the Cyprus property market is an unsettling factor for both buyers and sellers.

The local press reports that Cyprus property prices have dropped across the whole spectrum of the property market. Whilst the Royal Institute of Chartered Surveyors report covering the period to the end of 2010 describes the performance of the property market as ‘disappointing’, the report also mentions that there are signs of price stabilisation amid signs of growth in the economy.

At Fitzgerald’s there is ample evidence that buyers are returning to the market taking advantage of lower prices for holiday homes and for permanent residence. The numbers of ‘moneyed’ people coming from the South of England, Scandinavia and Russia to seek a new and better life is rapidly increasing. As well, Cypriots are cashing in on the situation too.

However the air of optimism is returning for the sellers. As demand increases, indications are out there that the market has bottomed out and the prospects are much brighter on the horizon. Although there are a lot of bargain hunters, the sellers are far more confident to achieve a ‘fair’ market price.

The behaviour in property prices across Cyprus is not so much ‘disappointing’, to paraphrase the Royal Institute of Chartered Surveyors report, but returning to a normal, manageable level down from being grossly overpriced, especially in Paphos. Limassol property prices seem to be holding on, perhaps banking on the Russian clients’ cash power, but with increased interest from Russian buyers in Paphos properties, they too are looking for better value for their money.

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The number of people who are looking at Fitzgerald’s quality property with Title Deeds is expanding rapidly, especially for villas, and the buyers are well aware that now is the right time to buy. Fitzgerald Estates has a large range of all types of quality property at all different price levels offering outstanding value.

To meet the demand Fitzgerald’s have expanded their portfolio of quality properties on www.fitzgeraldcyprus.com and their Prestige Property website www.fitzgeraldprestige.com As one well-healed Swede put it this week ‘I only look at your Prestige Property website www.fitzgeraldprestige.com because I want great quality under €1 million’.

‘There has never been a better time to buy your dream villa than now,’ says Daryl Fitzgerald. ‘The reasons that prices will increase, particularly for top quality properties, is that there is robust demand for quality properties at realistic prices.’

Of course, the question: “IS THE MARKET GOOD AT THE MOMENT?” depends on whether you have a property to sell, or whether you want to buy. In the textbook case, the market is often reasonably balanced between both housing stock levels and buyer numbers as it moves between extremes.

Cyprus, on average though, is not a textbook case. You must remember that the property market in Cyprus is DRIVEN by the ‘OVERSEAS’ MARKET SEGMENT and the OVERSEAS MARKET SEGMENT is dominated by the DEVELOPERS; their market dominance controls both the supply and the demand.

Firstly, developers contribute most of the houses for sale in the Cyprus market. They even sell the ‘future’ (off plan) projects, and most of those, to ‘overseas’ buyers. If you visit any of the major centres of Cyprus - be it Paphos, Ayia Napa, Limassol, or anywhere in between (have you seen Pissouri lately?) - the developers have been, and continue to be, extremely busy building condominiums, villages, complexes, projects, developments (call it whatever you will) and the majority of those are being built for ‘foreign consumption’.

Secondly, the developers are very active overseas promoting their products. Millions are poured into the advertising budget promoting developers’ properties - and why not ? Most of their clients come from places other than Cyprus! Exhibitions, travelling shows, seminars and advertising promotions are awash in the UK, Ireland, Middle East, Germany, Sweden, Hong Kong and that’s just the tip of the marketing dollar ‘iceberg’.

You may even be offered a ‘free’ inspection trip by the developer, or have an independent company offering a ‘fabulous opportunity’ to get to see the local ‘lay of the land’. Most of these promote the developers’ products, however, but at a double digit commission from the developers, it makes good business sense to do so!

While the developers surge ahead at the pace that they themselves have set, the ‘lucky’ new owners are often struggling to recover their purchase costs in the re-sale market. In Cyprus, the re-sale market is definitely not as buoyant as the demand for new property (from the developers).

The continual high prices that developers are achieving would tell us that this is a “sellers’” market. Why then, do we find developers still erecting the eyesore of ‘towering’ water tanks that grace a good number of our new ‘luxury’ developments? The quality of kitchen cabinetry is reminiscent of 1960s council housing and in many cases, the double-glazing is offered as an add-on ‘option’ (you pay extra for those!). Why do we find brand new properties suffering from rising damp?

On the other hand, when you choose to sell your home or ‘investment’, the buyers are thin on the ground and that would tell you that the re-sale market is definitely a “‘buyers’” market!

Here you must also remember that in Cyprus the major source of second-hand properties come from the ‘foreign’ segment, which is also vying for the ‘foreign’ buyer, but the ‘foreign’ buyers are, to a large extent, dominated by the developers (remember: years of conditioning and many millions were spent to achieve this) and considering that the re-sale market is relatively new, the buyers are not informed, or confident, as yet to go down the re-sale road.

Where does that leave you? If you want to sell your property, you cannot sell it for the comparable prices the developers are charging; you even have to consider the ‘bargain offers’ and you may find your property on the market for a relatively long time. All of a sudden, you find that there are not many buyers and plenty to choose from, leaving you positively exasperated and out-of-pocket!

I’d like to leave you with another term that you should know: THIS IS NOT THE UK MARKET! Things are somewhat different here. Before you buy, don’t fall into the ‘SELLERS’ MARKET’ trap. There are a lot of other options in the local market place and you might even find yourself in the ‘BUYERS’ MARKET’!