Our reasons why we chose to specialiSe in the re-sale market are many, but in a nutshell

• “RE-SALES MAKE BUYING PROPERTY EASY

• RE-SALES ARE SECURE, AND IN TODAY’S MARKET

• RE-SALES OFFER MUCH BETTER VALUE FOR MONEY”

The beauty of re-sale is that it comes complete as a package: you can see it, you can touch it, you can sit in it, you can take pictures. You know how it makes you feel and it only takes a second to see how you feel about living there!

No guesses, no speculation, no waiting, and no worries ‘is it going to be ready on time?’ In majority of cases it comes as a package with all the kitchen appliances, light fittings and air conditioning. The windows are dressed, the garden landscaped and the swimming pool beckons at no extra cost! Sometimes you might be lucky and find the right furniture is also included, so all you need to start enjoying your investment is to bring you suitcase!

Many a Cyprus developer has a marketing presence in foreign markets and Cyprus developers ‘travelling’ marketing shows are legendary and have been phenomenally successful, I may add! Almost everyone ever interested in property in Cyprus attends at least one! And a myth has been created that buying from developers is the only viable choice for people looking at investing in Cyprus property.

The very success of developer activity in the last 10 years has substantially contributed to the emergence of the property re-sale market. Anyone familiar with the Cyprus property market would know that the re-sale market to a large degree is in its infancy. But, as easy as it was to buy, it is very difficult to sell as many people are still totally unaware that there is an alternative, an alternative that, in fact, saves them thousands of pounds! And, they can enjoy it NOW!

Times are changing though. The article as far back as October 9, 2005 in the Cyprus Mail endeavored to analyze the factors influencing the local property market. To answer a fundamental question ‘Is the Cyprus property market a bubble?” it concluded that as a result of all the analysed factors… that “This will result in the increased demand for second hand accommodation, which is now priced at a level of 30 per cent lower than its new counterparts”.

In the end it is up to you! All you need to know is that re-sales are a real option and in the present market conditions offer much better value for your money!

When buying or selling property you inevitably come across many new terms but the two that have a profound effect on your bank balance are the “BUYERS” or the “SELLERS’ market”

But what do these terms mean and the challenges you face?

The terms refer to the relative numbers of buyers and sellers in the market at any given time. In other words, they sum up the relationship between the supply of houses for sale versus the demand for houses to buy.

If there are LOTS OF HOUSES FOR SALE competing for a SMALL NUMBER OF BUYERS then this is what is described as a ‘BUYERS MARKET’.

This means buyers are at an advantage – there are a lot of properties on the market and the buyers have many to choose from and they tend to be fussy. You have a lot more time to look around and you are a lot more confident of negotiating for a ‘Bargain’.

In this kind of market, buyers tend to be very selective and pay far more attention to the standards of maintenance, colour schemes or the presentation of property, etc. These factors are often overlooked in a sellers’ market as they race to actually secure a property before the prices rise even higher.

In such times owners have to work much harder and often are prepared to ‘improve’ the property to be able to present it in the best possible light to attract the attention of the buyer.

Conversely, in a ‘SELLERS MARKET’, there are FEWER PROPERTIES FOR SALE and MANY BUYERS competing for them.

As buyers scramble to purchase, the vendors have the advantage of demanding higher prices and are not receptive to ‘bargain’ offers as they are a lot more confident of a sale. In a ‘sellers’ market, buyers learn from experience to make up their mind much faster to purchase otherwise they may miss out on a property by delaying too long. This is the time when rising prices mean that buyers missing out on one property usually end up paying more for the next.

To buy property in the SELLERS MARKET often means you have to pay much higher prices and have less value for money. Owners are not inclined to improve the property (if they do they demand a higher price) and the buyers can not be too fussy about the standard of decorating or maintenance, for example.

Of course the question “IS THE MARKET GOOD AT THE MOMENT?’ depends on whether you have a property to sell, or one 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, is not a textbook case though. 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 and their market dominance controls both the supply and the demand.

Firstly, the 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 the ‘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 condominia, 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 adverting budget promoting developers properties. And why not ? –most of their clients come from places other than Cyprus! Exhibitions, traveling shows, seminars, advertising, promotions are awash in the UK, Ireland, Middle East, Germany, Sweden, Hong Kong and that’s 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 often are 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 the new property (from the developers).

The continual high prices that developers are achieving would tell us that this is the ‘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 1960’s council housing and in loads of 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 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 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 his) and considering 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 can not 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 chose 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’!

A personal insight to home purchase experiences by Lynda Hall (now Fitzgerald’s accountant)

So! You’ve decided to buy a property in Cyprus as maybe a holiday home or to rent out, or even to live here permanently. You’ve read the horror stories and seen the TV programmes about buying property abroad, so you think that the best thing to do is to buy brand new, perhaps even “off plan”. It will be your dream home.

It’s only when you’ve bought your property and are going through the nightmare of dealing with the developers and officialdom that you realise that if you had bought a re-sale, the majority of the problems you are having would not have happened if you had bought a previously-owned property.

WHY?

Well, let’s have a look at a typical purchase of a new house or apartment – “off plan”. You go into the office of the developer and you are shown pictures of the sort of property you are interested in, probably an artist’s impression. You are then taken to the actual development site and maybe building is in progress, so you can get a rough idea of what your property will be like. The view from your patio or balcony is amazing – straight down to the sea. You make plans for when you takeover your house – warm nights sitting outside with a drink, peace & quiet, watching the ships on the horizon. Then you sign up and go back home wishing for the day to come when your property is ready.

Completion day arrives, but maybe it’s been delayed. OK, not a problem, you can give them a bit longer. Finally you arrive in Cyprus and get the keys to your property. You open the door and everything’s fine except that the view of the sea is now obscured by another building with a big satellite dish on the roof. It’s not your developer who has built in front of you, but another company. Anyway, it’s lovely and hot and you’re relaxed. Then you notice that the kitchen units are not the ones that you chose. You switch the air-con on and the kettle, but the electric goes off. Talking to the neighbours, you find out that you are not yet officially connected to the mains electric – that’ll take a few weeks, months or in some cases over a year. Three days later, the water in your roof tanks has run out and you have no water. Round to the neighbours again and you’re told that you should have applied for a water meter. It’s not like at home where the water and electric are automatically connected, you have to do it yourself here, or ask your solicitor to do it.

You find some faults with your property and make a “snagging” list which you give to the developers. As you are going back home, you leave them a key for the work to be done while you are away.

Three months later you’re back in Cyprus. Some of the “snagging” list work has been done – the rest hasn’t. You find more problems and you are promised these will be fixed, unfortunately you aren’t told when!

You’ve been given information about the rental income that you can expect if you decide to rent your property. You’ve put a few adverts in your local paper, but the pictures of the views from your patio can’t be used, so you have to reduce the rent figure.

You talk to people around you and find out that the price that you paid is a lot higher than the selling price now. The property market in Cyprus is nothing like back home and you have paid maybe 10-20% more than you should have. You also have paid VAT, which is not applied to re-sale properties.

Suddenly, you become a bit disillusioned and wonder where you went wrong.

Basically, you should have bought a “re-sale” property.

Re-Sale from Fitzgeralds

You must get your head around this: In Cyprus RE-SALES are MUCH BETTER VALUE & ARE MUCH SAFER, no matter what you have been told back home!

So, how does this work? Well, the Cyprus conveyance system works similarly to the system in England, more accurately – Scotland.

You find a website, www.fitzgeraldcyprus.com , see an advert in a paper or a magazine, visit Fitzgeralds while you’re in Cyprus and decide you’d like to make a few enquiries. We’ll ask you to come into our office in Kato Paphos, (opposite the wishing tree on Apostolous Pavlou Avenue – the road to the harbour) and we’ll have a chat when you can tell us what you’re looking for and we can then give you a few options that we’ll take you to see. Everything is very “laid back”, no pressure and you must never feel obliged to buy something. OK, we’re not in this business for fun and we want to make money, but we want you to recommend us to your friends etc.

The properties that we take you to are already built and are pre–owned, so what you see is what you get. We cannot give 100% guarantee that other building work will not affect you, but we can give you an honest idea of what’s happening in the surrounding area.

A lot of our properties are already furnished. It may not be to your style, but as time goes on, you can gradually change the furniture to your own liking, or maybe you’ll be happy as it is.

The problems of the first year or so have already been ironed out. Your water and electric are connected, the snagging list has been completed, (hopefully), the property is ready to move into.

There are various ways to deal with the financial side of things. You can pay for the property outright or you can take a loan from a bank here in Cyprus, or a mortgage from the UK. You will need to put down a deposit and from then on, the contract is binding. If you pull out, you normally lose your money however, there are always exceptions. Once everything has been set up, it can take from as little as 2 weeks for you to take ownership of your property.

The way that the deeds of the property are dealt with is totally different from back home. The title deeds are originally issued in the name of the developer. If you buy from new, it takes anything from 3 years upwards for you to take possession of the deeds and you then pay the tax on the transfer. The amount paid is a percentage of the cost of the property on a sliding scale.

When you buy a re-sale property, quite often the title deeds have already been issued.

You MUST use a solicitor in Cyprus. We can, of course, give our recommendation, but it is up to you whether you take this. Dr Kourides & Ms Ruth Hatfield have extensive experience and speak perfect English. Normally, you will grant your lawyer Power of Attorney so that he can deal with everything here on your behalf without you having to be in Cyprus. Once everything is completed, you can cancel the Power of Attorney, but sometimes it’s handy to still have it, if you are not planning to live here permanently. It’s also a good idea for him to draw up your will in Cyprus – saves a lot of problems if anything should unfortunately happen.

Over the last few years, we at Fitzgeralds have learnt through experience that buying a re-sale property is the best thing to do. We no longer sell new properties, as we realise that the problems far outweigh the benefits.

So, come and have a chat - E-mail, phone, fax, personal visit. We’re here for you and when the time comes for you to sell your property, we would like you to come to us.

As a family business, we understand your concerns about buying abroad and whenever we can help – we will.

• Make your property stand out

The 2006 BA summer schedule covers the period between 26th March to 28the October 2006 and will include:

• 8 flights a week from Larnaca to Heathrow;
• 7 flight from Paphos to Gatwick;
• 4 flights from Paphos to Manchester

Furthermore, the airline will add extra flights as follows:

• One from Paphos to Gatwick for 29th March -26th April;
• One from Paphos to Gatwick between 3rd May -28th September;
• One from Paphos to Manchester between 1st May -28th October

March, 2006 Growth in tourism and its impact on the construction industry is well documented and understood but majority the of times we see it as the increasing number of foreigners opting for property ownership. Realistically though, the growth of the rental market is the major key factor keeping up the buoyancy of the property market.

The rental market has undergone a tremendous transformation if only taking into consideration the growth of custom built/ corporate investment/ holiday villages offering anything from apartments to luxury villas with a host of service packages. All in all, the rental product is becoming ever varied and more and more specialized.

Whilst these corporate giants lead the rental market, there are scores of private investors who have entered the market with a single residential unit whether through private construction or investing in buy – to – let housing units.

It goes without saying that the tourist ‘hotspots’ are a natural magnet for the tourist as well as the building industry and Paphos scores high on both counts. Paphos, as the UNESCO listed site, has the lion share of the tourist market and the demand for the rental property has reached new dizzying height, which is poised to increase even further when the tabled infrastructural projects are realized.

For starters, Paphos will have a ‘world class’ marina (ready by 2008), Paphos airport expansion to receive a lot more flights is on the agenda, and new golf courses coupled with enlargement of the existing ones will undoubtedly propel Paphos to the very forefront of service tourism in Cyprus. All this is a very good news for the holiday rental industry.

Somewhat disadvantaged but not out of the race for the tourist rental ‘dollar’ is the individual who does not have the advantage of economies of scale when promoting his product in the market place. On one hand the tourist ‘product’ is a complex creature on the other, the simple criteria of location, location, location is as valid here as anywhere else.

In many instances the decision whether to offer a ‘unit’ on a holiday let or not depends on the level of initial investment (over and above of the purchase costs) needed to run a successful holiday let. Increased competition means that it is harder to ‘stand out’ in the market place and even more expensive to ‘reach’ the market. With long term rental, the pressure of constant turnover to make the investment a success is not there however, the need to ‘stand out’ in the present market place is also very real and should not be underestimated.

A good summary on rental ‘insight’ was published in The Cyprus Real Estate Index (Dec2005). The article touched on the issue of ‘prudent acquisition’ as being the key factor to healthy returns “At present, return (i.e rents) on real estate, as a generality, show a level of 5%-8% p.a., but considering the steady capital appreciation (for prudent acquisition) of 5%-10%p.a., it creates a total return of approximately 10%-18% p.a.”

As 129,000 homes were sold to foreigners in 2004, the Tourism industry decided to investigate the concerns that the trend has a negative impact on the local Hoteliers. Research shows that this accounts for 5% of tourist arriving on the island. With Cyprus an increasingly popular destination (particularly Paphos area) hoteliers are not too concerned. Almost 27% of tourist arrivals seek their own accommodation and are not staying in licensed tourist establishments.

“This appreciation holds maily for particular projects and not so much for the odd property here and there. Beach property (or near) is much in demand and we forsee a considerable appreciation over the near future”

2.7 million passengers per year are projected to arrive in 2008, an enormous increase in tourism to Southern Cyprus, and consequently it will impact positively the local property market.

Prices rose by 15-18% per cent in 2004 and are set to rocket further with entry to the Euro beckoning in 2007/8 and the expected increase in investment in tourism. 340 days of sunshine per year means robust letting season from April to end of October producing gross rental yields of 8-12 per cent.

The Paphos region has an unusually strong winter rental season due to the mild weather and English-friendly culture, resulting in more impressive returns on investment that most other foreign locations.

2005 and 2006 showed 10-15% a year in capital terms and high rental yields for investors will still leave plenty of profit on the rental income after mortgage costs.

Here are some other links that may be of interest to you

• Read the News About Paphos
• See our Special Feature: Faros Village
• Interested in Rental property?
• Make your property stand out