Cyprus Property: Is the real estate bonanza to stop?
The Demetris Christofias administration is a point in hand, that lead us to the Bail In of 3/2013, as is the “Heroic” Cypriot MPs who turned down the E.U. proposal for a 9% universal haircut on deposits, which instead led to the 90% haircut on remaining deposits, the closure of one bank and rescue of another two. Yet even today and following the extreme misery that this has caused, our “Heroic” MPs not only did not apologise (not even one), but they appear without shame on TV and in the media repeating themselves how correct they were! Similarly, the same politicians who have led the Cyprus political problem to a dangerous situation, even get worse.
Notwithstanding the politics which is the basis of a good economy, we have adopted a most attractive scheme to help recover the economy using the visa/ passports measures, which have brought about EUR 4.8 bln in income from abroad of fresh money in real estate and other type of investments (hotels, schools, hospitals/clinics, etc) and helping the banks to reduce their non-performing loans (NPLs), as well as numerous developers who were at the bankruptcy stage to revive and expand and reduce the unemployment of the building industry to practically nil.
Yet, here we are again, with small politics and animosity/empathy amongst politicians we have some MPs raising the question of having this measure of passports/visa to be more or less abandoned.
The suggestion even of having the names of foreign or local investors published is a disaster. We are not alone in this and there are numerous countries which provide a similar scheme which are now delighted to see disappointed foreign investors being forced out of Cyprus towards their direction.
Yes, we have overdone it to the extent that we placed advertisements in the airports and other places, but instead of correcting this measure, we went the other way and by “our” stupidity to have this measure more or less cancelled is beyond us.
We are the first (6 months ago) to report in this paper that the situation was getting out of control and we blamed both the government and various auditing/legal firms of exceeding the limit. We even proposed an alternative plan for foreign investors to be directed to specific regions in Cyprus, using some sort of a quota system of distribution in order to benefit localities such as Nicosia and the mountainous regions which have been left behind in this bonanza. Because we are not alone in the E.U., several other competitive countries are now raising this issue and soon we will have a difficult situation in our hands. And all this because a couple of our MPs raise this point notwithstanding the government and the business associations objecting to it.
Foreign investors of such a scale have helped not only real estate, but the hotel industry (building new hotels, refurbishing and upgrading old ones) and even as far as private students halls development, addressing (for their own benefit of course) the lack of student accommodation. If one examines who these MPs are, one can ascertain that they have never worked in private practice, neither have they gone through the reduction of their income and firing own staff (which was in itself heart breaking for most of the private sector). Also, those MPs get paid travelling expenses (without having a car), their pension starts at the age of 60 years (whereas all the others at 63 or 65 years), tax free allowances and so on. It is good to have some objections on this passport measure and we were the first to warn the government and the developers that corrective measure is needed, but to go to these extreme by practically abolishing, it is beyond us.