August 20 2019
A good percentage of the real estate sales in Cyprus are concluded towards the foreign market with average around 44% of the total sales. The percentage refers to the number of units and not on the values of property sold. As such and bearing in mind that the foreign sales are on the upper-top scale, the percentage is much higher.
In addition E.U. members are considered as locals, so if they are taken out the percentage, at the end of the day foreign buyers will be in excess of 55% and in terms of value over 70% of the total sales value.
The foreign market up to recently comprised mainly of the British and Russian buyers, but more recently over the last 3-4 years we have demand coming from Chinese and other eastern/Asian countries nationals, whereas developers in their effort to expand their sales, are promoting their product in countries such as India, Vietnam, Korea etc, markets unknown to us up to very recently.
Whereas there is a certain level of common understanding between Cypriots and Europeans and a slightly lesser one with the Russian speakers (and we took some time to understand each other) in terms of the legal system, understanding the contract terms, as well as the common expenses law, with the more recent “arrivals” we are having problems both in the translation and the attitude/understanding each other minds. So there is an added difficulty in the meeting of minds here.
Ourselves we have originally used translators in our correspondence and other communication, but Chinese and other languages not being a commonly spoken language, we have ascertained after some time, that the translators translated whatever they felt like and at the end having a bigger appetite, they introduced for sale other properties than those which we were offering. In this way the translators were getting at least 5% commission, as opposed to our own offer of 2%. A large difference and a lucrative scam job (it may be only our experience since we understand it is not widespread).
Another problem that we have met, is the measurement system where some nationals are knowledgeable of the metric system (meters etc) others are not (being more familiar with the imperial system (and the quoted sq.mts. extent are sometimes mistaken by sq.feet). On one occasion our client was delighted to get to know that having 200 sq.mts. apartment was not 200 sq.feet but 2.152 sq.feet (and this after we have concluded the deal mind you). Imagine if it was the other way round?
Communication of minds is a major prerequisite for any buyers, but since in this case (real estate) we refer to a relatively large investment capital, it becomes more important. This becomes also important when trying to open a bank account for money transfers to Cyprus and the newly introduced KYC and laundering of money investigation are most provocative and time consuming for buyers. This coupled with the personal data restrictions makes one wonder how a much sought after sales deal can be concluded. In a recent case of ours regarding a sale in the Famagusta region (around €400.000) to a Dutch potential buyer and having his loan application approved in a preliminary form, we are still waiting for the deal to go through by bank officials (delay of over 3 months). On another occasion a Belgian millionaire sent his down payment for a deal of €1 mil. to a Cyprus bank. The local bank informed us that this was a scam (transfer from HSBC bank). A furious client objected and as a result of this, we duly received an apology by the banks, but we almost lost a sale. If one adds to the “negotiations” the translation confusion, one can appreciate the problems that we are facing in the market. In a past report of ours and based on actual facts at our Possidon Gardens project that we manage with an Ukrainian client, we had some difficulty in communication that was however by passed with the consumption of our local zivania and his vodka (with sougla to go). “Our” Chinese clients are not necessarily influenced with food and drink and this makes life more difficult.
Communication of minds involve also personality issues (even amongst the locals) and recent buyers from the foreign market have personality problems (with ours) regarding “arrogance” with the higher the budget the bigger the problem on this count.
In ending some of the problems are created by the buyers advisors, such as advocates who have other ideas in their minds, such as trying to sell themselves directly real estate that we provide clients to them in order to carry out the legal work involved (one of them has even a website of his own to promote – so in such cases in addition to their legal fees there is a hefty commission which they can claim from the seller (quite illegal mind you).
Regrettably the money involved is large, making these 3rd parties involved creating a big money appetite.
So there you are dear readers, so that you do not have the impression that real estate sales in plain sailing in calm waters.