Hi all,

I've just returned from a 5-day trip of the Paralimni area. I spoke to Andreas of Emporiki Bank. It seems my two-bed Avlida apartment has increased in value by 30% on 2006 prices and was prepared to finance accordingly. The bad news?? over supply developers are throwing up apartments on every available piece of land. Take also into consideration all the 'for sale'/rental signs and I would say the market is pretty stagnant.

Rental agencies are also having problems with certain ethnic minorities in pockets of areas who are moving large familiies into small 1 and 2 bed apartments leading to overcrowded pools and disgruntled holidaymakers to whom this practice is 'unfamiliar'. Also factor in the dust/dirt and noise generated by the surrounding construction and it does not make for attractive sales/rental. Seems we have at least another 18 months to wait before, in my estimation anyone would want to buy/rent, the only option at the moment is to 'sit' and hope the capital growth continues.

Re. the water shortage. Serious rationing occured in the smaller villages outside the main tourist drags and water had to be transported from Greece.

Thanks Pauline for update

The 30% increase sounds quite good until you factor in the following costs (these are based on my unit):-

1. Fixed Costs on purchase - Finders Fees, Legal + VAT, Morgage Arrangement Fee = 8.5% of purchase price.
2. Ongoing Costs - Mortgage Interest, Maint & Ins = 6.4% per annum, so far for 18mths so around 10% of purchase price to date.
3. Exit Costs on Sale (if you're lucky) - Agents fees & Legal + VAT = 10.25%

So that 30% has already been swallowed up and that doesn't include all the other costs I have incurred.

I, like many other Investors also paid for Aircon, appliances & furnishings which was another 10.5%. I couldn't hope to recoup this or the additional 10% I paid for an upgraded kitchen. Then, if I add other costs like getting people to check my apartment monthly in my absense and my travel costs at handover it gets even more worrying. I daren't even cost the endless hours (2 1/2 months) we spent trying to sort out the mess at handover that we were dealt with, or trying to resolve the miriad of things that should have been dealt with at Contract stage.

Oh and what about the cost of the Deeds when they come through? And the Community Charge?

Don't want to keep sounding negative but it's hard to see how anything less than 60% increase in the first 3-4 years after purchase would result in anything other than a loss for those who are lucky enough to sell.

There is of course the Tax benefit which was my main reason for purchasing in Cyprus but it takes nerves stronger than mine (and lots of tattoos!!!) to stay there long enough to claim residency.

Jo

One more thing, PS sold this deal on the basis that we were getting these units at 20% below market value, so is it looking like our investments have only seen 10% increase since 2006? Something isn't right here.

Jo

As a fellow Cyrus investor and without wishing to add to the gloom, two pretty obvious questions spring to mind

- how can an unsaleable unletable properties be said to have gained 30% in value

- if market value equals the price at which a property can be sold in a reasonable timeframe, why wouldany developer ever sell anything at 20% below market value.

I have always considered the PS 20 percent discount 'questionable'....... but at the time relied on the information to be accurate.

On a personal note, on any holiday I do not wish to have a fabulous view of overturned shopping trolleys and surplus sewage pipes from my holiday balcony view........ which is currently the case around Avlida complex and the general area..... serious completion work needs to be undertaken by the local council and a huge 'tidy up' and I certainly wouldn't expect any potential holiday rental clients to be happy about this either!!!!

As my apartment is rented (at a much reduced rent which is the reason my renter remains) I chose a top of the range Protaras hotel to stay in with top of the range prices.... two months ago for the same rate I stayed in the new 'Raffles' hotel in Dubai and had a much more comfortable bed with unparalled facilities available, (although the view in Cyprus admittedly was better). Because of the credit crunch people are demanding more value for money for their well-earned holidays and other locations (particularly dollar-based with English widely spoken) are offering better value with far superior standards. Cyprus needs a serious change of attitute and needs to lose its complacency in the holiday market. I went because I had business to complete otherwise it would have been way down on the list of places to spend an inexpensive and pleasant week. Also being quoted 60 Euros for a taxi fare from the airport to Protaras was not a good start..... I presume this was the reason for the surplus of drivers and taxis!!!

I also overheard several conversations during my time in Protaras of people's intentions of not returning due to poor value for money and preferred locations such as Egypt/Morocco which apparently offered far superior facilities and value for money. Rental numbers are down in all categories and in my opinion this will continue because of serious competition, a fact which the Cypriots need to seriously acknowledge...... Incidentally, my taxi fare in Dubai from airport to hotel was a grand total of 12 Euros and was metred not plucked from the air because of the quality of my suitcase!!!

Whilst I find your report on your trip and views on Cyprus quite disturbing Pauline I also find it a bit reassuring as I was beginning to think it was all in my mind!!! There are quite alot of people that love Cyprus but they are very different to me and seem to have different priorities to mine (& it seems to yours) - unfortunately most don't seem to want to spend money on the things that matter to the likes of you and me.

I have read so many articles in the Cyprus Mail and on forums about the need for change, particularly in the areas that you have raised in your post. The colour of money and the male ego reign supreme on that little Island and in my view are preventing necessary change.

Hi Jo,

We obviously missed the 'rose coloured glasses collection point' at the baggage reclaim area. I fear the rendering on Avlida will crumble long before long-held outmoded attitudes and bad questionable business practices do.