Real Estate Purchase and Chinese Investors

  Article By : Marinos Kineyirou|  Published at : Politis Newspaper| 13-01-2013

Marinos Kineyirou: President of the Cyprus Association of Estate Agent Entrepreneurs -President of the Real Estate Agent Entrepreneurs Association of Larnaca/ Famagusta and Property Auctioneer

Marinos Kineyirou Manager of Marinos Estate Agencies LTD

Marinos Kineyirou Manager of Marinos Kineyirou Estate Agencies LTD

  Real Estate Purchase and Chinese Investors

The Cyprus Association of Estate Agent Entrepreneurs continues to study the measures taken which grant permission of emigration by applicants who are nationals of third countries and invest in Cyprus. The permanent residency visa with the investment of more than three hundred thousand euros, the depositing of title deed or purchase agreement and of official receipts to repay the amount of two hundred thousand euros, at least, has given a significant boost to the property market and created an increased interest by the third countries. This incentive is a positive contribution to the reviving of the Cyprus property market, new jobs, and the increase of the state’s revenues as well as the recovery of the economy. The favorable geographical position of Cyprus and the great interest of investors to have access to the European Union make our country a dynamic marketplace for Chinese and Russian investors. The great turn of interest in buying properties for sale in Cyprus by the Chinese, is apparent mainly due to the incentives given above.
In an article published in November 2012, the Association asked for measures for the problems identified in the existing legislation and the way it works in order to set a plan for a proper coordination of investments in Cyprus. The plan should ensure the state’s intervention to protect Chinese Investors, the proper promotion of the Cyprus property market, approach entrepreneurs and the differentiation of the property’s purchase price from the amount of at least 300,000 euros so that to show the correct image of prices for real estates.
The measures proposed by the Association not only were not heard but instead the Ministry of Interior with an official announcement on its website dated on 12/12/2012 and aiming to facilitate investments’ attraction in Cyprus by third countries and to strengthen the policy for granting migration license to third country citizens, as long as capital is imported from abroad to Cyprus, decided to provide third countries the possibility to acquire more than one residence in Cyprus, provided they meet the criteria and conditions described as follows:
1. Permission to obtain land that has not been divided into plots with an area of up to 4000sqm, to a foreigner or a couple of foreigners who are nationals of a third country, for the erection of a residence for ownership.
2. Granting a license to acquire up to two units in the same development, provided that the units are adjacent (in horizontal or vertical direction) when they concern Cyprus apartments or residencies to be possible to merge them into one unit.
3. These units may be either two housing units (apartment or residence) or a dwelling unit and a store with an area of 100sqm or a dwelling unit and an office with an area of 250sq.m
4. In case of a couple, this restriction will apply in total for the couple, i.e. they are not allowed to acquire more than two units, according to the combinations described in paragraphs (2) and (3) above.
The Association stresses that the information on overvalued real estate prices cannot go unnoticed as apartments and houses have been sold in unrepresentative prices, especially to Chinese investors. The amount of 300,000 euros pushes the property prices to increase and sometimes it does not reflect their true value, e.g. for a property worth less than 300,000 euros, the owner would have to raise its price to gain interest among Chinese investors. Also, with the purchase of two (2) housing units in the same building, which are similar, with the same size and with the ability to integrate, the measure of the government promotes only a part of the property purchase and which belongs to companies selling real estates which are actually progressing into sales as opposed to private property owners who once again they are left on the margin by this measure of the Government. As a result, few properties are promoted and not the whole property market of Cyprus.
The Cyprus Association of Estate Agent Entrepreneurs stresses that while the Government should promote the Cyprus Real Estate Market, in fact it does not do so resulting in the promotion of the market by individuals and not licensed/registered real estate agents. This leads many buyers to be exploited while simultaneously property prices increase unreasonably, reaching up to 30% more than the actual value of a property.

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