New Towns V Single House Development

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We are all for the Government to encourage development in real estate and its eagerness to attract especially foreign investments to the island. The various incentives given so far are in the right direction and the new Minister of the Interior appears to be ready to offer what it takes to start the real estate/building industry revival. The foreign investors’ proposal for a €7 bil. investment at Yeroskipou village so announced by the Archbishop and the numerous relaxations/deviations needed will be a serious test on the Government’s readiness to “give what it takes” and more importantly to reply to the applicants within the next 30 days if their proposal is, in principle, acceptable. We also note the correct urgency to build a casino and yet more recently a rather odd promotional brochure regarding a real estate golf development at Pafos, which states that buyers of villas (for €2 mil.) will automatically attract a Cypriot passport, it is rather odd, since it refers to promises made by the Minister of Interior and a 6 month reply/passport in hand (otherwise money back). As far as we know the passport possibility was given for a sum of €5 mil. investment and there was a proposal to reduce the amount to €2 mil., so they must be the first to benefit for this (not yet announced).

We do hope that this, as all as other such developments become successful since one expects that even a €2 mil. holiday home is quite expensive for anyone indicating that if they (the buyers) choose to live in Cyprus, it will mean added income for the country. We are referring to the publicized Chinese golf project at Pafos and we wish the project all the best. Care is needed since by comparison of population Cyprus is just a single street in Beijing, so that we do not change to a great extent the demography of the country. A recent report on Malta, referred to the Maltese Government of placing a quota on Chinese buyers. We say this reservation of ours, since €2 mil. buy with a passport is not prohibitive in a country (China) with at least 1 mil. millionaires and others.

So all seems to go well and let’s keep our fingers crossed for the future.

In addition the new development plan in agricultural areas give way just about to everybody by allowing all sorts of large scale developments into agricultural areas. Not necessarily bad of course if a project needs a large area of land and an alternative way, doing without the non workable and time consuming relaxation/ change of use procedures. So we end up from one extreme to another. The extensive development in agricultural areas in addition to the spoil of the environment, it will affect the existing development zones since buyers/owners of agricultural land provided they meet certain criteria, will become owners of development land – thus affecting demand and value of existing development land. So that we are being more fair to the Government, the development in agricultural areas refers to specific projects which need a lot of land (e.g. Hospital, Schools, Universities, Sports Centres etc) but in addition it allows housing/commercial/industrial development to go with it, thus creating some sort of a small town.

Having said all these, how is this new attitude of development coincides with the existing prevailing policy of not allowing the development of a single house in an agricultural plot? Yes we do have the Minister’s promise that this will change, but when? In a sense all these changes benefit the large investor/land owner and penalizes the small one, yet the small investor I.e. single house development, as a total, may be as big as one of the much sought after international projects.

We feel that we are trying to “find” ourselves in this tragedic prevailing situation and we go from one extreme to another. What incentives one gives in real estate, at the end, the question is are there buyers for the product? Cyprus is not the only country that has financial problems, but Europe as a whole has. So available with cash investors have many offers and alternatives and if one country comes with a proposal, another country comes up with a more competitive proposal. We have now an American who approached the Cyprus Government to build a huge casino Las Vegas type who also has applied to Spain and chose an area on the outskirts of Madrid only to run into problems due to the fact that he did not want to pay tax. Now he is back to Cyprus, realizing we say that we are in a worse position than Spain. His intention is for Cyprus to have a rethink!!

So here we are at the end everybody is trying to get the best deal from everybody else.


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