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Balance Sheet of the Cyprus Economy – Do We Have Hope?

Balance Sheet of the Cyprus Economy – Do We Have Hope?

Dear readers, we have prepared for you an “accountancy based balance sheet” regarding Cyprus future in terms of real estate development. This is a road map of “things to be done”, in order to offer some sort of hope, but at the same time, not to dream that everything is OK. Cyprus being such a small economy, little things, make the economy turn around (our reservations on the handouts of money to all sorts of people by this Government has been criticised in a previous article of ours).

  • Two new airports are completed and operational – be it expensive for tour operators. New private executive lounge for private jets under way pending.
  • Limassol marina is under construction with heavy financial contribution.
  • Larnaca marina – unknown execution
  • Paphos marina – Still pending – Time unknown
  • Ayia Napa marina on target with investors going ahead.
  • One new golf project has received a permit (Larnaca), another one under construction (Pafos) and another 3-4 pending (out of the 10 but we record those which we think they will actually be built).
  • Limassol old town is undergoing numerous renovations including the old town and the castle area – Also under way is the old fishing harbour with construction timing within the year 2011.
  • New/reviewed town planning regulations on high rise buildings have shown their positive results in Limassol. Other projects follow and the revised approach will provide an international image for this and other towns.
  • Investment funds of a large scale from abroad, including Dubai, Israeli Cos and others (Qatar in addition) will cause others to follow, showing interest for little Cyprus, including the latest three deals of land purchases (€18.0 mil + €14.0 mil. + €7.0 mil.) at Nicosia.
  • We have internal political harmony (a major asset) to the extent “allowed” by democracy.
  • We are improving the tax system on offshores and especially shipping, which will make Cyprus perhaps the top destination for Shipping Cos.
  • Investments in exchange of permanent residency and investments for passports is a major attraction for wealthy 3rd countries residents. Already initial results are most positive.
  • The building amnesty is coming (but a bit late) but at least is coming and this will address to an extent the real estate lack of title issue.
  • We still need a change of local attitudes (see decision of Hilton Hotel to leave the island because they did not receive an operation permit since 1999!!). The relation between the private investment and red tape is attrocious.
  • A P.R. Cypriot president is another asset to note. Not normally found in the E.U. and bearing in mind our “Communist” president, this is a pleasant “shock” to remember for investors.
  • A doer Minister of Interior who has our sympathy for his desperation in the Civil Services procedures is an added asset. He is trying at least.
  • Etc etc

Regrettably those of us who are at a “mature” age, it will take time to realise the benefits of most of these and other projects, but we estimate that it might take 2-3 years to see the economic benefits, but at least the policy is there and there is hope especially for the new investors and the younger generation to have jobs. We have watched a BBC programme on Singapore and Hong Kong about “good” living and we can tell you that living in a 2 bedroom apartment of 60 sq.mts. on the 17th floor does not encourage us to go there.

Small is beautiful, as we always say, but people must also have an income and security of their investment (see Spain with compulsory acquisition with no compensation and 20% unemployment). Surely, as Cyprus, we have numerous problems, but we can look at the immediate future with some hope.