Land development brings in €1 bln of fresh capital to Cypriot economy

A rising trend in new property deals have brought in about €1 bln in foreign funds in the past two years, defying the negative climate in the market, especially after the Eurogroup decision in March 2013 to impose a €10 bln bailout and austerity programme on Cyprus.

Pantelis Leptos, Chairman of the Cyprus Land and Building Developers Association, told the group’s annual meeting that “the property industry remains one of the dynamic sectors of the economy that is attracting new capital, developing new projects and creating jobs.” He said that based on “conservative estimates” more than €1 bln in foreign funds poured into the Cyprus economy in the past two years, with 3,767 property sales completed in 2013, the year of the economic crunch, with 1,017 of these sales being to foreign buyers, while in 2014 that number rose about 20% to 4,527 property deals, of which 1,193 were to foreigners. So far, a 10% year-on-year increase in property sales has already been recorded in January.

Leptos said that a number of significant deals worth “tens of millions” were also concluded with foreign investors buying into seaside resorts, hotels, privileged properties, marinas, large commercial and office buildings. As regards unemployment, he said that the rate of 25% is clearly on a downward path, which is below the record jobless levels that have hurt the construction sector the most. “This shows that the land development sector has slowly taken off. The construction sites are working again and labourers are once again finding jobs.”

Leptos added that the sector needs time and incentives so that properties can be put on the market again and that there has to be an end to the victimisation of developers, most of whom are highly reputable. He added that there is a need to continue cooperation within the business community in order to improve competitiveness and for the Cyprus economy to attract investors again, with bureaucracy remaining the biggest stumbling block. “The prospects and the signals are encouraging,” Leptos said, adding that “when there is calm and the right framework in the market, companies can show the necessary flexibility, adjust to new circumstances and adapt to new higher standards in order to achieve high sales rates for the greater good of the economy.”