During the crisis, Europeans were selling homes in Cyprus, and Russians were buying them
During the crisis, many Cypriot real estate agencies survived thanks to clients from Russia and the CIS. "We moved the bulk of our operations from our English-language portal Clickhomecyprus.com to the Russian-language Clickhomecyprus.ru. This was a correct and successful decision, because in the last two years the Cyprus real estate market has been living off clients from the CIS countries," shared Stavros Papadouris, managing director of the real estate agency ClickHomeCyprus. While in 2007 about 70-75% of property buyers in Cyprus were from Western Europe, primarily the UK, and the remaining 25-30% from Russia and the CIS, starting from 2008 the share of clients from the former USSR grew to 80%.
Buyers from Russia are mainly divided into three categories: those who want to purchase property for no more than 100-150 thousand euros, those who have a budget of 500-700 thousand euros, and those who are willing to pay over 2 million euros. It is thanks to the last category that the Cypriot real estate market grew.
From 2008 to 2010, prices for luxury real estate right by the sea increased on average by 20-–25% or stabilized, while prices for other real estate fell by 25-35% and are recovering very slowly.
"Prices fell for houses located in the city center, its outskirts, and in villages. Before the crisis, the middle class bought such houses to spend winter and vacation here, and after retirement to move here. But the crisis pulled the rug out from under the middle class, demand fell, and prices followed," says Papadouris. According to him, real estate agencies realized in time that they should sell property to people above the middle class, where demand remained, since the crisis hit them less. Thus, along the coastline of Limassol, the second largest city in Cyprus, where about 30,000 Russians live, advertisements for sale or rent are very often written in Russian.
At the same time, many clients were forced to sell their homes in Cyprus to find money to support their businesses. But it was mainly citizens of the European Union who took such steps: according to Papadouris, about 70% of the sold homes belonged to the British, and 30% to CIS countries.
Russians bought expensive homes not only in Cyprus, but also in Switzerland, Austria, Germany, the UK, Monaco, says Stanislav Zingel, president of the international real estate agency Gordon Rock. "It means safely parking capital," he explains.
"Half of the well-known businessmen and politicians, especially from Russia, own property in Cyprus, but all this real estate is registered not in their names, but in companies located in different countries," shares a realtor who wished to remain anonymous.
Cypriots somewhat overstated the pace of price growth, Russian experts believe. "Some properties increased in price by 8-10% due to moving to a new stage of readiness and high demand for them," says Elena Yurgeneva, director of the elite real estate department at Knight Frank. "Officially, prices did not drop, but transactions for homes worth, for example, 10 million euros were closed at the level of 8.5-9 million euros.
In 2009, many developers, especially in Cyprus, needed money to repay loans. By selling an expensive house, they could immediately close the loan, so they were willing to make concessions. Russians understood this perfectly, but it was possible to do this a year ago, not anymore," adds Zingel.
Olga TANAS.
