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HOME • INSIDER • CYPRUS • M. Kynageirou: The war will maintain the high prices of …
& nbsp & nbspEvagoras Prokopiou & nbsp; & nbsp;
The period we went through with the casings in the world & nbsp; supply chain brought inflation and increased costs to building materials which in the end determine both the cost of building a property and its selling price. The crisis in Ukraine has been added to the equation by exerting further pressure on inflation. The question is no longer whether the Ukrainian crisis will extend the period of increased prices, the question is about amount, says Marinos Kinaigheirou, President of the Cyprus Real Estate Registration Council. in an interview with Insider & nbsp; also refers to the other environments faced by the market in recent years & nbsp; real estate and especially the real estate sector.
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When it was created and who is the role of the Cyprus Real Estate Registration Council?
The Real Estate Registration Council (SEC) is a Legal Entity under Public Law and has the competence to exercise the powers provided to it by the Real Estate Laws No. 71 (I) 2010 to 2017. The Registration Council, by law has the role of supervisory and disciplinary authority, & nbsp; as well as the body that approves and renews applications of Assistant Real Estate Agents & nbsp; to attend examinations for the real estate agent's license. Specifically, it aims to:
• & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; to register the real estate agents and to issue the relevant certificates or licenses in accordance with the Law on Real Estate Agents.
• & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp ; & nbsp; to keep the Register of Real Estate Agents and to delete registered real estate agents from it, in compliance with the provisions of the Law on Real Estate Agents.
• & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; to exercise disciplinary control over the registered real estate agents and to impose the disciplinary penalties defined by the Law on Real Estate Agents.
• & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; ; & nbsp; to exercise any other powers or powers which are constitutive or inherent in the performance of the tasks assigned to it, and
• & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; to file indictments with the Court in relation to the criminal offenses provided for in the Law on Real Estate Agents.
The Council consists of seven members in total. & Nbsp; Of these, four are real estate agents among them the President of the Council. The other three are civil servants, consisting of the Director General of the Ministry of Interior or his representative, the Director of the Department of Urban Planning and Housing or his representative and the Director of the Department of Lands and Surveys or its representative.
What are the criteria and procedure for registering a real estate agent? How many members are registered in the Council?
In order to be able to practice the profession of real estate agent in Cyprus today, one must be registered, in compliance with the provisions of article 15, in the Register of Real Estate Agents of the Council. & Nbsp; The conditions require that he is a citizen of the Republic or of any other Member State, is not in bankruptcy or any other legal incapacity and has a clear criminal record. Also, according to the provisions of the Law on the Recognition of Professional Qualifications, the registered real estate agent must have obtained a recognized diploma certifying successful completion of training, lasting at least three years in matters related to the practice of the real estate profession and has completed professional training in the Republic real estate agent lasting at least 12 months. In addition, he must have sufficient knowledge regarding the real estate and urban planning legislation of the Republic, which are ensured by the successful completion of an examination carried out by the Council itself.
Regarding the qualifications for registration in the Register of Assistant Real Estate Agents is:
(i) is a citizen of the Republic or of any other Member State
(ii) is not bankrupt or under any other legal incapacity by law or court decision
(iii) has not been convicted of an offense involving dishonesty or moral depravity or, if convicted, has been remedied under the provisions of the Rehabilitation of Convicted Law
(iv) has graduated from a recognized Republic or in any other Member State a secondary school
(v) is employed by a licensed real estate agent.
At the end of 2021, the Real Estate Registry numbered 418 & nbsp; registered real estate agents.
Has the pandemic reduced the number of real estate agents in Cyprus?
In general, the pandemic certainly affected the work of Real Estate Agents as well as the entire real estate sector and land development. After all, it could not be unaffected, since the economy was affected both in Cyprus and internationally. In 2021 the situation in the sector has improved and we hope that this year the situation will be even better, although the challenges are significant and multi-level, especially after the Russian invasion of Ukraine.
Regarding the numbers of Real Estate Agents, in 2019 we had 407 licensed real estate agents (natural persons), in 2020 due to a pandemic we had a minimal loss and we had 402 members, while in 2021 their registration continued normally and reached 418. In conclusion, the pandemic did not particularly affected the renewals of licenses of licensed real estate agents.
Is there illegal real estate and what impact does this have on the real estate sector and the economy in general?
Unfortunately, illegal real estate in Cyprus was and continues to be intense. Despite the ongoing initiatives and actions of the Council, however, the phenomenon is evolving into gangrene, undermining the legal and approved professionals and endangering the interested buyers, who without their knowledge may fall victim to scams. Illegal real estate agents usually act between buyers and sellers in order to obtain the relevant commission, avoiding the obligations of legal brokers to the state. We estimate that the value of illegal brokerage amounts to hundreds of thousands of euros per year and state losses to several thousand. As a Real Estate Registration Council, we are in a constant crusade to crack down on the phenomenon through complaints from those who break the law. We invite the public to work only with registered real estate agents, whom they can easily find on the Council's website. We also call on our fellow citizens, as in cases where they are approached by experts, to inform us accordingly to take the necessary measures.
In recent years, the District Courts have heard dozens of criminal cases related to the conviction & nbsp; legal and natural persons who illegally practiced the profession of real estate agent and/or violated the provisions of the Law on Real Estate Agents.
In addition, Prohibition Ordinances have been issued by the Courts, which order and prohibit the guilty persons from carrying out any real estate work without holding the relevant permit by Law. If convicts fail to comply with the decree, they are subject to arrest and their property is confiscated. as real estate agents.
Did the pandemic hit the real estate market in general? It is often said that during a crisis there are investment opportunities, this expression is also found in the Cypriot real estate market?
Uncertainty always influences large investment decisions. Especially when uncertainty is linked to health reasons. This is exactly what happened in the period 2019-2020. We may be accustomed to saying that crises hide opportunities, but not all crises are the same. The crisis of 2013 really hid opportunities for those who had the necessary liquidity for it and we saw financially sound companies in that period to seize the opportunity and become leaders in their fields of activity. Both in the real estate sector and in others. The crisis caused by the pandemic was not such as to create many investment opportunities since, fortunately, with the support measures taken by the government, most businesses and households coped with the difficult situation without having to default on their obligations. Today, in the real estate sector there are opportunities both for the purpose of owning or acquiring a second home as well as for investment purposes as there is a large supply of specific types of real estate. We are constantly seeing ads for real estate at bargain prices from licensed Real Estate Agents. There are, of course, certain types of real estate for which the demand is greater than the supply, such as apartments in the city centers, while gradually there is a lack of large, quality office space.
Government plans have determined or & nbsp; determine this period and the type of real estate that moves the sector?
Government interest rate subsidy schemes have indeed boosted the domestic market at a difficult time when demand from abroad was almost nil. Now the market is recovering and low interest rates on the part of banks are also contributing in this direction. As well as the negative interest rates on deposits, which push into other types of investments with first choice real estate. & Nbsp;
Can the domestic real estate market replace the Cyprus Investment Program or should it be found? new way to attract foreign investment?
The domestic market can not replace the buyers that attracted the Investment Program for this and we estimate that the growth boom we have seen in the last 6-7 years, has been limited. Fortunately, it seems that most of the projects aimed at this audience will not be left unattended, however, some that were in the planning stage may not be implemented, at least in their original form. There are no magic solutions for attracting foreign real estate buyers. As a country, we should offer an attractive package of services, lifestyle, financial and tax incentives, which will make Cyprus a destination of choice for high-income people but also as a regional base for international companies and their employees. & Nbsp;
How do you think the reduced VAT rate should be determined in relation to the acquisition of a first home?
We said from the beginning that the most objective criterion for determining the value of a property is its sale price and based on this, the relevant VAT rate should be calculated. We consider that the most rational solution is the legislation that will occur to concern a reduced VAT rate only if it is a question of acquiring a first home and to be based on the final sale price of the property. Certainly the content of the original bill submitted by the Ministry of Finance would create unnecessary distortions in the market, something that the ministry itself indirectly acknowledged. & Nbsp; & nbsp;
Demand for rental property has decreased due to of the crisis? Did the pandemic affect their prices and where are they expected to increase or decrease?
The demand for rental housing has not decreased. On the contrary, it has increased. In particular, there is an increased demand for apartments in city centers. Due to the reduced supply, it makes sense for prices to move upwards but at controlled levels. Where there has been a greater increase in recent years is in Limassol. Also, there is an increased demand in relation to quality office space due to the continuous decline of foreign technology companies in Cyprus. During the pandemic, the significant reduction in daily rent increased the supply of real estate for long-term rent and consequently kept prices down. The expected increase in demand for rental holiday homes, in case of end of the pandemic, we estimate that it will affect the prices of these properties. & Nbsp; & nbsp;
How much it affected the sector, and especially the final Real estate price, the increase of building materials but also inflation? The question is how long will inflation last and especially the rise in energy costs which generally entails the prices of raw materials as well as of course the problems in the supply chain. The Ukrainian crisis will surely extend the period of rising prices, the question is by how much.
From the April issue of Forbes magazine