We are aware that there is an increasing interest from Home Buyers from China. Regrettably there are no statistics available at this point of time, but estimates range the concluded deals from 100-600 over the last few months and who we have applied to the Lands Office to deposit the contract. The Chinese Buyer is only interested (at this point of time) to buy a property not less than €300.000 (and not much more either) a sum required to justify an application for a permanent residency visa. So far the signs are positive and this trend is expected to continue and at an increasing rate. It is also a fact that the Chinese do not know Cyprus (not even where it is) let alone the prevailing prices and procedures. The goal to "get the visa" it seems that blinds them from carrying out some sort of basic due diligence. What is more worrying is that in addition to the local developers/agents etc who, to an extent, care little about their clients, what is worse, is the Chinese visa/estate agents who care even less. So based on our own information, a Chinese agent requires:
±€20.000 for securing the visa from the applicant
15%-20% commission on the sales price
20%-30% commission on the legal fees where a lawyer is involved. Local lawyers charge around €2.000/case but this is on the up with everybody trying to get on the "riches" bandwagon.
You do appreciate that all this sort of charges push up the sales prices, increasing them accordingly with the unaware Chinese client reaching almost double the true price. Speaking at our Lands Office Pafos colleagues we were informed that all sales are around €300.000 be it 1, 2, 3 bed apartments. This odd situation shows that someone has being had.
It is with a great disappointment that we realize these going ons, because, we will, now, as a country, have started to experience some sort of real estate revival from this market. House purchase is first, as a start, with the more serious buyers and investors to follow. A recent sale of a specific villa at Limassol for €2.5 mil. to a Chinese is a start, as is a serious enquiry by a Chinese developer who wishes to expand in Cyprus. We feel that either the Government through the Lands Office/or the Chinese embassy in Cyprus, the China-Cyprus association and even CIPA should look at this situation more closely and warn the Chinese citizens on the possibilities of cheating that there might be in a transaction. Instead of discouraging the Chinese interest, we feel that this action, on the contrary, will encourage them to invest more, since this will give them an added feeling of security. If we avoid to do this, our Chinese real estate success will be very short lived and it will add to the existing hundreds of foreign unhappy buyers, who have helped through their protests etc to push the market at the คอนโดมือสอง กรุงเทพ bottom quicker them otherwise. The situation reminds us of the mainly British estate agencies (cowboys) who arranged inspection flights free of charge and the clients were hearted like a flog of sheep and were sold properties with a commission to the agent 15%-20%. Now these buyers are the very people who have the major problems with these cowboy agents, nowhere to be found since their Cos were dissolved. Notwithstanding the above and at this point of time, the Chinese market is too valuable to fool around with. Had we have direct flights it would have been great and I understand that the CTO is considering some sort of a direct link next year. But then China is such a vast country it remains a problem on how to reach the destination airports.
For these reasons we do suggest:
A basic information leaflet in the Chinese language will be a good help stating that:
No need to pay the ±€20.000 for the visa. A local lawyer can do it giving a fixed rate of say €2.000. To carry out a valuation on the property to acquire in order to ascertain any increases from the correct market value. To check for mortgages and other impediments including building permits etc. To have a good knowledge of the common expenses, transfer fees, property taxes etc which do not come with the buy but they appear later. To appoint a local to look after their property when absent or through the developer to seek a monthly report since they are not "next door". To be given a cost of the living index itemized, health and maintenance cost, insurances etc. Etc etc
In the meantime we are preparing a Chinese information site for them and their advisors to study (in Chinese).
There will be always crooks around but we should take a preventive action now so that our past mistakes are not repeated. The Chinese embassy has a huge role to play as is the China Cyprus Association and of course the Cyprus Government.
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