Slowing Demand and Potential Greek CIP Have Cyprus Developers On Edge
“We are barely able to sell one passport a month,” said the chairman of the Association of Property Valuers, Polis Kourousides last week, according to Financial Mirror.
The chairman of the Association of Property Valuers, the chairman of the Cyprus Property Owners Association, as well as the Vice-President of the Valuers Association all made bleak predictions for the Cypriot CIP’s near future. The chairman of the Association of Land Development and Construction Businesses, however, expressed tentative optimism.
Referring to the marked deceleration in demand for Cypriot citizenship by investment following the addition of a EUR 150,000 donation requirement earlier this year, Chairman Kourousides of the Property Valuers Association expressed a less-than sanguine outlook for the program, indicating also that he expected Cyprus would lose investors to Greece, which is reportedly planning its own CIP.
His concerns may be premature; IMI has learned that the Greek CIP remains at the drawing-board stage and that internal political opposition to the plans remains non-negligible.
Less gloomy was Pantelis Leptos, Chairman of the Association of Land Development and Construction Businesses, as well as the managing director of the development company that bears his name.
While Leptos expressed unease about a growing stockpile of unsold luxury residences in Cyprus, he remained cautiously optimistic, pointing out that non-CIP investors could still absorb any excess supply.
“More or less, developers have managed to sell apartments in older projects. However, I don’t believe that developers of newer projects have sold any flats. Some luxury apartments can be sold to locals or to foreign businessmen who simply wish to acquire a modern apartment with a beautiful sea view,” he commented.
Kourousides, however, did not consider non-CIP demand picking up CIP-investors’ slack a realistic scenario. “These cases, if any, would be but a handful,” he lamented, predicting also that sales in the luxury segment would drop sharply in the years ahead, particularly in Limassol.
Chairman of the Cyprus Property Owners Association, George Mouskides, said the situation could take on “dramatic proportions” as demand from international buyers slowed, while Vice-President of the Valuers Association, Andis Telemachou fretted that “we are one step away from seeing the saturation of citizenship for investment.”
Telemachou revealed CIP-stakeholders are “skeptical” about the program’s future, especially in Limassol where the number of unsold units keeps rising, and expressed particular concern that the lead-time between building-permit applications and actual construction could land developers in a bind.
“When the crisis hits, developers will not have time to react as they would have already bought the land and materials and could have already started building.”
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Christian Henrik Nesheim is the founder and editor of Investment Migration Insider, the #1 magazine – online or offline – for residency and citizenship by investment. He is an internationally recognized expert, speaker, documentary producer, and writer on the subject of investment migration, whose work is cited in the Economist, Bloomberg, Fortune, Forbes, Newsweek, and Business Insider. Norwegian by birth, Christian has spent the last 16 years in the United States, China, Spain, and Portugal.