Cyprus Banks to Sell off Billions of Euros worth of “distressed properties”

Because of losses associated with the Greek economic crisis, three major banks in the south are having to sell “distressed properties” they have repossessed because of mortgage defaults in south Cyprus. It is been suggested that, like in Spain, these properties should be put on the market at knock-down prices. If this turns out to be true then the impact of the already ailing property market could be very negative, driving prices down further.

On top of this, there could be a back-lash from ex-pats who found that their paid for but title-deed-less properties are suddenly sold. This response would surely hit international newspapers and further damage the poor reputation of the south’s property market. When Moody’s downgraded the south to junk bond status (Ba1) with a negative outlook, along with the three banks, it was forced to look for its finance outside traditional international markets. That’s when its new best friend Russia came forward with a €2.5bn low interest rate loan.

In the north the problem is similar with 900 cut-price properties about to go on the market. These will be auctioned during the summer months and again there will be a back-lash which will tar Turkish and Greek Cypriots with the same brush. It will be interesting to see if the north have the heart to do what the south seems not to want to do, namely call fraudulently mortgaging contracted properties a crime. In that way the north will go some way towards dispelling the false impression that it is the modern equivalent of the Costa del Crime and a safe haven for criminals.

Print Friendly, PDF & Email

Comments are closed.