A well-known chartered surveyor in Cyprus has warned that the island’s property industry needs to use “caution” in the way it treats the Chinese property buyers who are currently beating a path to the island, if they are not to be alienated the way many British buyers have been in the past.
Writing in the Cyprus Mail on Sunday, Antonis Loizou, of Antonis Loizou & Associates, noted that the Chinese buyers were mainly coming to Cyprus in order to obtain residence visas, and were looking for residential units costing the requisite minimum price to qualify for a visa of €300,000, typically in the area of Paphos.
A number of Chinese companies had also, Loizou said, taken an interest in the island, presumably to cash in on the trend, with the result that two hotels were under development by a joint venture with Chinese investors in Lanarca, and a five-star hotel is being built, also with Chinese investor involvement, in Sotira.
“These developments by themselves are encouraging for the building industry,” Loizou noted, but longer term, he said, the goal should be to encourage Chinese tourists to visit as well, and to ensure Cyprus’s reputation in China remained a positive one.
“What one must be careful with is the Chinese visa agents who also operate as estate agents, supported regrettably by various local advocates,” Loizou wrote.
“The average commission required by these agents is 20% on the sales price, a large amount, but it seems that so far they are getting away with it. Such high commissions are not illegal, but are they honest?
“This reminds us of the early years of the British market demand with such scams, which for various reasons lead to the creation of the [Cyprus] Property Action Group, with all sorts of bad publicity. We hope that this experience will not be repeated in the future, but it is doubtful and we consider it inevitable.”
Loizou noted that it was not surprising, given such sharp practice that is already starting to become evident, that Chinese individuals carrying placards “objecting to Cyprus” had been seen at a recent property exhibition in China.
Nigel Howarth, publisher of the Cyprus Property News, a Cyprus trade publication, noted that some of the experiences Loizou’s article in the Cyprus Mail said Chinese buyers have been describing were remarkably similar to the sorts of experiences British property buyers endured years ago.
In a column on his own website about Loizou’s observations, Howarth said Loizou’s recounting of a sales procedure experienced by a Chinese couple who were approached by a visa agent at a property exhibition – offering inspection trips to a number of countries, including Cyprus – bore “many similarities to an article I wrote eight years ago [entitled] ‘Gullibles travels in Cyprus: The overseas property exhibition'”, which had been about British buyers.
In another column in his publication, Howarth noted that one side effect of the problems that hit Cyprus’s residential property industry in the post-financial crisis years is that the Bank of Cyprus is now “the island’s second-biggest private real-estate agent, after the church”.
‘Economic Citizenship Programmes’
Cyprus is not, of course, alone in seeking to lure Chinese property buyers – or visa shoppers, as the case may be – to its shores. For more than a decade now, but especially since the 2008 global financial crisis, cash-strapped countries around the world have targeted wealthy foreigners willing to trade cash, typically in the form of an investment of some kind, for a residential visa or passport. The International Monetary Fund refers to such set-ups as “Economic Citizenship Programmes”, or ECPs, though they are also sometimes called Citizenship by Investment and Investment Visa schemes.
Although China has sought to discourage the practice, wealthy Chinese emigrants are becoming an increasingly visible presence not just in Cyprus but in many other countries as well, particularly Canada, which was one of the first countries to introduce an investment visa programme, as well as a number of islands in the Caribbean.
To read Loizou’s piece on the Cyprus Mail’s website, click here.
To read Nigel Howarth’s, on the Cyprus Property News website, click here.