On Monday 14th October, the Central Bank of Cyprus published a report on the sale of mortgaged properties for the second quarter.
According to the island state's main financial institution, the number of properties sold at auction on the island rose sharply between April and June. According to the agency, this is due to the tightening of the legal framework for seizing property from debtors.
Interestingly, in the second quarter of 2024 alone, owners who bought their first property and pledged it to banks were served with 146 notices for payment arrears of more than 120 days. Among them: the value of 133 properties was below 350 thousand euros and 13 were above this amount. In addition, local financial institutions sent 323 letters warning debtors that their homes would be sold under the hammer. The list included 284 properties worth less than 350 thousand euros and 39 properties worth more than 350 thousand euros. Finally, 69 owners were given an auction date to sell their properties.
From April to June, 2 auctions were held in Cyprus, where 9 properties were sold for a total value of 2.85 million euros, purchased as primary residences. At the first auction, 6 properties were sold for less than EUR 350,000 each, while at the second auction, 3 properties were sold for more than EUR 350,000 each.
In addition, local banks seized 265 properties from debtors in the second quarter of 2024, with a total value of around 23 million euros, compared to 156 properties with a total value of 14 million euros in the first quarter of 2024.
Recall that in December 2023, Cyprus introduced a new legal framework to protect first homes worth less than 350,000 euros.
However, owners are in no hurry to apply it. Finance Commissioner Valentina Georgiadou said that since the introduction of the new legislation, few borrowers have approached her office for help. Only eight applications have been made, and none of them could be investigated because of pending court cases.
Although the law provides for the establishment of a special asset recovery court to prioritise cases involving primary residences worth up to €350,000, no such court has yet been established. In addition, Supreme Court guidelines provide for the expedited processing of cases involving these properties, but this process has not yet gained momentum. This applies not only to repossessions, but also to complaints about overpricing or unfair payment terms.