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Cyprus

Cyprus became the latest euro zone domino to teeter in 2012 just when the worst of the crisis appeared to be over. In March 2013, a compromise rescue plan backed by euro zone finance ministers called for Cyprus to wind down one largely state-owned bank, Popular Bank. The raid on Popular Bank was intended to raise most of the 5.8 billion euros that Cyprus was required to raise as part of the bailout.

PropertyInternational
INVESTMENT

Lucky Real company in Hong Kong seeks buyers for homes in debt-hit Cyprus

Pair talk up island's potential despite 40pc drop in prices, but others say it's not for faint of heart

PUBLISHED : Wednesday, 08 May, 2013, 12:00am
UPDATED : Wednesday, 08 May, 2013, 2:33am
 

For Michel Verdy, a former banker and executive of security firms based in Canada, retirement was the beginning of a new adventure rather than the end of a career in high finance.

Rather than sitting back to enjoy the fruits of his labours, Verdy embarked on a new mission - looking for Hong Kong buyers interested in purchasing homes in Cyprus.

With his wife, Lynda, a former property broker in Canada, Verdy set up a property consultancy firm in Hong Kong a few months ago, primarily to sell properties in Cyprus, a country that recently got a €10 billion (HK$101.6 billion) international bailout to save it from bankruptcy.

Their company, known as Lucky Real, is now marketing several resort-style developments in Cyprus. All projects are being exhibited in their permanent showroom-office in Kwun Tong.

"Our targets are Hong Kong buyers," said Verdy. Cyprus had great potential, he said.

It had gas reserves that could supply 40 per cent of the annual gas consumption of the euro zone countries. Meanwhile, its residential market had hit a five-year low after the 2007 and 2008 peaks and now was the time to hunt for bargains, he said.

The nation's economy was set to rebound from a low point, which would lift property prices, presently down some 40 per cent down from their previous peak.

But some international property experts experienced in selling overseas properties to Hong Kong buyers expressed reservations about investing in Cyprus property at the moment.

"Cyprus, in my view, presents a higher investment risk than virtually all other markets, certainly the mature markets such as London and New York," said Richard Kirke, managing director of Colliers International Hong Kong.

"Obviously a significant amount of capital has been stripped from the Cyprus economy with the recent banking crisis. Thus, when considering whether to invest in Cyprus, I would not recommend buying if the investment makes a significant percentage of your entire property exposure.

"However, if the investor has a broad property portfolio, and has a good knowledge of the Cyprus market and a positive view of the euro zone, then perhaps taking a small exposure to this market is justified. But it is not for the faint of heart," said Kirke.

Koh Keng-shing, founder of property consultancy Landscope Christie's International Real Estate, also cautioned against buying property in Cyprus.

"Generally speaking, I don't think that Hongkongers will be interested because they don't have a good understanding of the market.

"Also, having experienced falls in local property values of up to 70 per cent, talk of a 40 per cent fall in Cyprus is nothing," he said.

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verdym
Cyprus Overseas sales:
Although overall sales to the overseas market in April declined 2% compared to April 2012, sales in the districts of Paphos, Larnaca and Famagusta increased. These may be due to purchases by those seeking residency permits or citizenship though various government schemes and perhaps those seeking distressed sales at bargain prices.
Michel Verdy
Lucky Real

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