The map of real estate restructurings and new mortgages

11.11.2022

For the first three quarters of the year (January-September 2022), the number of real estate transactions in Cyprus amounted to 15,031, of which 886 were loan restructuring transactions, i.e. the rate is 5.9%. In relation to the corresponding period of the last year, a slight increase was recorded – by about 1.3%.

According to the analysis carried out by Landbank Property Consultants LTD, in quantitative terms, the province of Nicosia has the most restructurings, accounting for 38% of the total. This is followed by Limassol and Larnaca with 20% (each) and Paphos with 18%.

The cost of restructuring in Nicosia and Paphos far exceeds the rest of the provinces. In Paphos, restructurings amounting to 64.5 million euros were registered, representing 33% of the value of all restructurings. Accordingly, in Nicosia the total cost was €62.4 million or 32%. This is followed by Limassol with 43.9 million euros or 22.5% and Larnaca with 21.7 million euros or 11%.

Continuing the trend of previous years, the largest percentage of restructurings, both in terms of quantity and value, falls on industries.

Mortgage

In the first nine months of 2022, 11,218 mortgage loans were issued in Cyprus for a total amount of 2.5 billion euros, according to data from the Cadastre and the Land Survey. There was an increase of 16.1% in value.

The largest increase in the number of mortgage loans (on an annualized basis) was recorded in March, where it reached 38%. In value terms, the largest growth was recorded in February – 75.2%. The upward trend in the value of mortgages compared to the previous year appears to be driven by activity in the Paphos area.

Nicosia

During the reporting period, 333 restructurings were carried out in Nicosia, which is much more than in the rest of the provinces. Their total value was €62.4 million. Compared to the corresponding period last year, there is a slight increase in quantity (1.2%), but a decrease in value (2.4%). The majority of restructurings involved fields at 60.8%, followed by land plots at 13.3%. Refurbishment of apartments is 12.7%, and houses – 9.5% of the total.

Analyzing the values, the restructuring of the fields is 30% with a total value of €18.7 million. They are followed by the restructuring of commercial buildings by €13.3 million, or 21.4%, and residential buildings by €9.3 million, or 15%.

The number of mortgage loans in the province of Nicosia for the first three quarters of the year decreased by 5.2%, but increased by 26.3% compared to the corresponding period last year. A significant (annual) increase was observed in February and March, reaching 179% in value and 43.6% in quantity, respectively.

Limassol

In the first three quarters of 2022, a total of 180 loan restructurings were registered, amounting to about €43.9 million. On an annualized basis, a decrease in the number of loans by 20.7% and value by 17.2% was recorded. Most of the restructuring concerns land, 56.1% of which is fields and 7.2% plots. Residential restructuring followed with 22.8%. In value terms, the residence restructuring exceeds EUR 17.0 million, or 38.8% of the total value. This is followed by fields with 14.9 million euros, or 33.9%, and land plots with 4 million euros, or 9%.

In the province of Limassol, an annual increase in the number of mortgage loans by 4.9% and the cost of mortgage loans by 1.8% is recorded. The positive dynamics is mainly due to the two months of February-March, where the increase compared to the last year period averaged 71.9% in terms of quantity and 58.6% in terms of quantity.

Larnaca

In the province of Larnaca, 181 restructurings were recorded for a total of €21.8 million. Compared to the corresponding period last year, there is an increase in the number of mortgage loans by 26.6% and the cost of mortgage loans by 34.1%. In terms of property categories, most of the restructurings concerned fields (91 or 50.3%) and land plots (24 or 13.3%). This is followed by apartments (25 or 13.8%) and houses (33 or 18.2%). Looking at the values, the largest part is in the fields with 6.1 million euros or 27.9% and the plots with 4.3 million euros or 20.1%.

The mortgage lending trend in Larnaca District is positive year on year both in terms of quantity (4.7%) and value (6.1%). The largest year-on-year growth was recorded in January (56.5% in quantity) and February (103.6% in value), limiting any negative performance in other months.

Famagusta

The province of Famagusta recorded the fewest number of restructurings: 34 (down 8.1%) for around €2.9 million (down 43.7%). 47.1% belong to apartments, 32.4% to fields and 8.8% to residences and shops. In value terms, the renovation of apartments reached 1.3 million euros, which is 45.4% of the total. This is followed by fields with 0.64 million euros, or 22%, and houses with 0.43 million euros, or 15%.

Mortgage loans in the province of Famagusta generally tend to decline in both quantity (4.2%) and value (0.9%). However, noteworthy is the growth in the cost of mortgage loans in September, which amounted to about 360%.

Pathos

Finally, the restructuring in the province of Paphos recorded an annual increase of 13.7% in quantity and 211.1% in value. In total, 158 restructurings were registered for the amount of €64.5 million. Of these, 60.8% of restructurings relate to fields and 13.3% to land plots. In value terms, the largest amount of restructured facilities, 49 million euros, or 76.1%, falls on fields and about 4 million euros, or 6.25%, falls on tourist complexes.

Paphos appears to be recovering from the negative 2021 results, recording a 61.9% year-on-year increase in value but a 2.9% decline in quantity. The recovery trend began at the beginning of the year, with the largest annual increase for the reporting period recorded in March in terms of numbers (51.8%) and in September in terms of value (900%).

*Andreas F. Christophoridis/ Landbank Real Estate Analytics

Source and photo: inbusinessnews.reporter.com.cy, Editor estateofcyprus.com