property prices and exchange rates

guinness


Joined: 10/03/2008
Posts: 224

Message Posted:
12/12/2008 14:27

I cannot be the only one who is wondering if property pricing in TRNC will now either change to Euro, or will remain in GBP but with a suitable hike in price to allow for the lower value of the GBP.



I appreciate that many resales are made by Brits who want to take GBP home to the UK, but all materials etc. for new builds are bought in USD/Euro/YTL, so the builders have a good case for re-calculating their prices.



So what do you all think - it could become a very hot topic if the GBP does not rise in value soon.



Cheers



guin

cyprusishome


Joined: 31/03/2007
Posts: 2381

Message Posted:
12/12/2008 15:14

I do not believe now is the time to do anything.



It is only a couple of months since the brown stuff started flying, the money markets are going up and down like a YO-YO and how can you tell from one day to next what will happen.



Look at US, last night all was wonderfull with a deal for motor industry, this morning, senate has turned it down and far east went into tail spin again.



So yes it is a question that may need to be asked but to answer in next 6 months could be fatal. IMO of course.

reproman


Joined: 05/06/2008
Posts: 252

Message Posted:
12/12/2008 16:16

i believe anyone who is serious about selling should really take the first offer they get. As its only going to get worse.



I remeber people in early 2008, before the crash really kicked, turning down offers of 5 - 10% under asking price, their greed has meant that they are now unable to sell altoegther or have to take 25 - 30% off.



over the last few years many have made a tidy profit on property, wether that be in the TRNC or UK, but now its time to realise the boom is over...if you wanna sell...you have to price it right.



Repro

guinness


Joined: 10/03/2008
Posts: 224

Message Posted:
13/12/2008 11:41

RE: 2

Yes you are right, but its only those of us who are used to observing the bigger picture who would watch and wait. There are plenty out there who are less tolerant and default to kneejerk response.



RE: 3

Yes again you are right, but in my current experience there are very few who appreciate they should cut their losses. There are so many people who want to sell for no less than the price they paid, often bought at a market high. They are not looking at current prices, especially of new builds that remain unoccupied and for which the developers are dropping prices significantly.



One seller on another forum has a fixed price (above my preferred level) and won't even send me more information or a picture in an effort to get my interest.



Its these people who may be the first to think about the value of the GBP. I can undertand that many Brits selling will still want pounds to take to UK, so it does not matter to them. But developers costs are in USD/euro/ytl.



Guin

WAZ-24-7



Joined: 18/10/2008
Posts: 695

Message Posted:
13/12/2008 15:11

GBP has been the preferential currency for property transactions in TRNC.

The YTL is clearly the local curency.

Imports into TNC are most often transacted in US$ or Euro.



The weakness of the GBP against $ and Euro means that material prices are getting much mre expensive and will continue to rise as intrest rates in UK fall yet again.



Even in current recession expect prices for new build to rise. Labour rates in construction have alo shown significant rise.



Of course risks of new builds and off plan puchase are well covered on this forum. Prices are low now and its buyers market. If your going to do it do it now and capitalise on the current market conditions.

DO YOUR RESEARCH anf get it RIGHT. Contract of Sale, Title deeds, Mortgage encumrances, water and electric supply, contracted completion schedule, Permisson to Purchase. Check out the HBPG site...very helpfull for new buyers.

joandjelly


Joined: 24/02/2008
Posts: 2953

Message Posted:
13/12/2008 19:19

Guin if you cannot afford the price the seller wants then what is the point of sending you the information. It's a bit like telling people you can afford a small hatchback but then start enquiring about a top of the range 4x4 (for example) hoping that someone is desperate enough to take a silly offer. I wouldn't send you the details either because you are basically a time waster (in that scenario).

RedSnapper


Joined: 12/08/2008
Posts: 540

Message Posted:
13/12/2008 19:27

If materials, Land and labour have gone up 20% but due to the credit crunch and recession property has devalued 20% would that make the price of your house the same as it was 18months ago?(irrespective of whether you wish to sell or not)

guinness


Joined: 10/03/2008
Posts: 224

Message Posted:
13/12/2008 21:35

24-7. You appear to be repeating (agreeing) with what I was surmising. Though having been active in the TRNC market for over a year I think I am acquainted with the somewhat unique local procedures ! And don't forget that a lot of supplies come from Turkey so a good proportion of newbuild costs are ytl dependant.



J&J. The timewasters are those who daydream about what they want to sell for and don't realise that they have to 'sell' and not just wait for someone to come along and buy. This is just what Reproman is saying.



Redsnapper, good point, but does it apply to those resale properties of 3-5 years old I wonder?



However, back to the proposition - will the falling value of the pound cause a shift in pricing, especially if the euro gains more significance to the local economy, though not necessarily build costs of course.



I appreciate your joint input, thank you.



guin

RedSnapper


Joined: 12/08/2008
Posts: 540

Message Posted:
13/12/2008 21:57

The property is still good value and people who are horribly forced to try and sell(same in u.k as well) may drag the market down or stagnate it temporarily. I mean my 5 bed villa with pool and hammam still represents a good purchase at 27,500...

guinness


Joined: 10/03/2008
Posts: 224

Message Posted:
14/12/2008 02:15

Redsnapper - I think you may jest ;o)



Surely that figure is in ytl ?



guin

RedSnapper


Joined: 12/08/2008
Posts: 540

Message Posted:
14/12/2008 09:13

yep thats right, i missed the last bit off whilst choking..

brian24001


Joined: 23/03/2008
Posts: 606

Message Posted:
14/12/2008 13:30

I would say the present situation will make things here very attractive.

Just imagine people earning in sterling, who have been researching properties in the Euro zone for the last year or so, now face a 20%+ price rise to buy.

With property here in GBP still, people will be getting even more for their pound.

Similarly, for people earning in Euros/dollars, property here just dropped by about 20% in term of actual cost to them.

It would not surprise me at all if properties start selling well in the spring, also with an influx of Russian buyers now, also buying at the preferable rates in GBP.

WAZ-24-7



Joined: 18/10/2008
Posts: 695

Message Posted:
14/12/2008 17:10

Guinness.

I do not think that the Euro will become the preferential currency in TRNC until

EU incorporation of Turkey or TRNC is achieved.



Threre is clearly a melting pot of currencies that have influence in TRNC.

YTL and sterling predominate followed by Euro and US$.

Many turkish mainland imports are based upon the Euro even though turkey is not an EU member. This is because of the very high level of trade between EU member states and Turkey.



This will reflect upon build costs in TRNC which effetively must rise. However with current recession it is clearly a buyers market and prices will remain depressed.

I sumise that if you intend to buy. Buy soon, Buy re-sale, Buy titled and non mortgaged property.

fire starter


Joined: 19/06/2008
Posts: 3401

Message Posted:
15/12/2008 10:08

hi guin

the construstion prices for materials are in ytl.

the shops in lefkosa are now displaying lots of thinks in euros.

but local shoping is still ytl.

property prices, i would say wait hang on in there.

i was speaking with a cypriot friend yesterday, he was saying the same as us.

next year the credit crunch will affect the trnc.

with no outside buyers as people feel the pinch, lots of developers owing big bucks to the banks, more and more property issues, we all said the property market will be suffering.

i remember a saying we had when buying and selling at auction.

your first offer is always your best offer.

if i had something to sell right now,i would be taking your money asap.

i spoke with a surveyor in the uk on friday, uk prices have dropped 5% since august.

this could easily happen here, and could be worse still.

breezyboy


Joined: 14/05/2007
Posts: 1179

Message Posted:
15/12/2008 14:35

brian

Dont bank on the Russians, They have been badly hit by the recession and unless they got hard currency from wherever before October they have little chance of getting it from a legit source now. Since September the banks in Russia and Ukraine have put serious restrictions on US$ and euro withdrawals.



There again there are a lot of illegit sources :>)

Stewart


Joined: 19/07/2008
Posts: 1107

Message Posted:
15/12/2008 16:52

Prices will continue in YTL and GBP...prices up by 20 / 25% in 2009 to take in higher build costs...good for all those already bought / signed contracts.

Could be a bit of a problem with new build companies who have already agreed a sale but will need to pay higher construction costs ( may go broke )

Should be OK for those builders who start building once they have taken the deposit.

Look out for the Euro in next couple of years ( first stage will be all banks accepting Euro accounts )

WAZ-24-7



Joined: 18/10/2008
Posts: 695

Message Posted:
15/12/2008 20:48

Stewart



Not at all sure that the GBP will remain as favoured currency in TRNC.

Sterling is now at its weakest since inception of the EURO.

The Euro will take over especially as it now has a position of strength, is the currency of the ROC, is widely used as the buisness currency in Turkey.



Whilst property is available at rock bottom prices and is still in sterling. Buy NOW. Once builders and developers move to the Euro, which they will then watch ( if you are a GBP investor) at least 20% go onto your costs.

fire starter


Joined: 19/06/2008
Posts: 3401

Message Posted:
16/12/2008 14:49

waz

lots of developers have stopped building for the moment.

with so many unsold properties what is the point?

to build another estate which is like a ghost town?

i don't see property here going up in the near future until the rest of the world recovers from the financial crisis.

guinness


Joined: 10/03/2008
Posts: 224

Message Posted:
18/12/2008 21:55

Sorry, been working away, but pleased to see how you have developed the theme.



WAZ, buying resale may be good sense but there are very few on the market - I spent 8 days looking for them (at my own expense). The best deals if you want to call them that are with some major developers who have unsold stock on their hands. North Coast Constr are a good example with new 3 bed flats selling at a 15k discount. The resales are mostly with people who want to reclaim that which they paid at the top of the market. I would be very pleased if resales up to 35k got in touch with me. (But see my detailed 'report' on another forum).



Firestarter, thanks, I can understand that you buy a lot of materials for your small development and it would be in ytl, but the main developers tend to buy direct form importers, rebar say which comes mostly from Ukraine in USD. But your observations are very accurate



Russians want to come to TRNC cos the banks in south are coming under EU laws.



cont......

guinness


Joined: 10/03/2008
Posts: 224

Message Posted:
18/12/2008 22:02

cont....



I have some dealings with Russians and this is their greater motive, apart of course from other EU controls creeping up on them.



I have good contact with a family who both build houses and run an agency (they do not feature on any negative postings !). They feel that it is only an emotional attachment to Sterling that keeps it going, citing rental as a good example which is used by even local landlords and local tenants. They also say that industrial plant and of course cars are still priced in Stng and see that continuing. But the emotional attachment will soon run out when the market has some good deals priced in Euro, not just housing but also other capital items. They see it as being on the horizon too.



By the way, our friend firestarter and hubby are among some on the forum who know my wife and I personally, so I am sure FS will verify that I am not a timewaster as has been inferred !



Nice participation all, thank you.



cheers



guin

Hector


Joined: 26/08/2008
Posts: 2352

Message Posted:
18/12/2008 22:16

With the Orams case looking like being decided against them, any property on exchange or Greek land is not only worthless but a liability.

guinness


Joined: 10/03/2008
Posts: 224

Message Posted:
18/12/2008 22:32

Hector - What a jolly thought ;o)



My quest has always been for a pre 74 Turkish title thankfully.



But from what I know from my professional contacts with both the EC and UN, I can't see any serious repossessions coming. I am sure diplomacy will prevail.



Nice to see a thread developing !



cheers



guin

fire starter


Joined: 19/06/2008
Posts: 3401

Message Posted:
19/12/2008 09:35

yes

i will vouch for guin and his wife that they are looking for a property here and are not timewasters.

neither are they fools!( so be real on your prices and you may have a sale!)

guinness


Joined: 10/03/2008
Posts: 224

Message Posted:
20/12/2008 01:25

Oh you are so kind - I blush ;o)



Guin

fire starter


Joined: 19/06/2008
Posts: 3401

Message Posted:
20/12/2008 12:04

guin

after the recent developments with the orams case/situation.

you know i always speak the truth!



p.s. hasim say hello!