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Property sales drop off in Cyprus

Property sales have reached record lows in Cyprus, thanks to current economic conditions. Figures from the Department of Landlords and Surveys showed  that just 285 contracts of sales were deposited at the Land Registry in April - the lowest figure on record, Cyprus Property News reported. Conversely, in April 2012, 461 contracts were deposited at the Land Registry. This equates to an annual decline of 38 per cent.

Of the sales completed last month, 59 per cent were done on behalf of domestic buyers, while 41 per cent were deposited by overseas investors, according to the newspaper. This indicates that despite the state of the Cypriot property market, interest is still high among foreign buyers. Paphos appears to be at the centre of activity, with overall sales actually increasing by seven per cent year-on-year. However, this is the only ray of light in an otherwise bleak April.

Transaction numbers fell in all districts, Cyprus Property News revealed. Nicosia experienced the greatest losses, with a 71 per cent decline, followed by Limassol (-41 per cent), Famagusta (-38 per cent) and Larnaca (-29 per cent). The price drops are part of a growing trends and during the first four months of the year, a 44 per cent fall in transactions has been noted. So far in 2013, 1,298 properties have been sold in Cyprus, compared to 2,313 during the same period last year.

This drop-off is down to a reduction in domestic sales and in April a fall of 51 per cent was noted in the domestic market. Despite estate agents selling properties at considerably knocked-down prices, the real estate sector is unable to get itself back on its feet. Cyprus is certainly in the doldrums lately and while May could see sales rise once again, the increase is likely to be slight.

However, the situation will come as no surprise to many, after the country accepted a bailout in March. Under the rescue programme, Cyprus' second largest bank, Laiki Bank, will be closed and deposits over the agreed sum will be placed in a bad bank. These deposits total around €4.2 billion and may be wiped out entirely. Smaller deposits will be transferred to the Bank of Cyprus, which will undergo huge restructuring. No bailout money will be used to recapitalise it.
Article by +Peter Mindenhall on behalf of