The Cypriot government is being advised that it shouldn’t meddle in the housing market. Ahead of a discussion yesterday (October 16th) among lawmakers over whether a bill to regulate rental prices should be introduced, the Cyprus Property Owners Association warned that it would take any available legal measure if the government intervened, Cyprus Mail reported.
Shopkeepers’ union Povek and opposition party Akel are pushing the bill to bring about a 20 per cent reduction in residential and commercial rents for a year. They claim this would ease the pressure being placed on tenants and businesses by the recession, the newspaper explained. However, such a move would put many landlords at a disadvantage.
Voting on the bill has already been postponed several times, much to the frustration of Povek. Yet, the Cypriot Property Owners Association is adamant that lawmakers must leave the market alone. Head of the body, Giorgos Strovolides, told the Cyprus Mail that rental prices are already falling naturally as a result of market forces. Indeed, many landlords have moved to reduce rents themselves to help keep tenants.
Should the bill pass, Mr Strovolides explained to the newspaper that the Cypriot Property Owners Association would “responsibly” consider further measures. This includes questioning the law’s constitutionality, which could bring the Supreme Court into play.
Regulating rents is likely to deter foreign investors in Cyprus – something the country can’t afford to do. Data from the Department of Lands and Surveys showed sales to overseas buyers remained the same in September from the year previous, with 77 homes sold, Cyprus Property News reported. However, during the first nine months of 2013, property sales in the overseas market dropped by 28 per cent year-on-year from 1030 to 737. There are some areas where activity is picking up though, with sales to overseas buyers in Paphos and Limassol increasing by 25 per cent and 12 per cent respectively.
This concentrated growth is the result of activity from Chinese nationals seeking to secure visas by purchasing property costing more than €300,000 (£253,833). Arabs are also flocking to Cyprus, helping to improve transaction numbers.