Banks have begun Auctions on foreclosed Cyprus Properties
- Sep 11, 2016
- 2 min read
The Bank of Cyprus has begun auctions on foreclosed Cyprus Properties, signaling the first property auctions under the new foreclosure legal framework implemented as part of a €10 billion bailout by the EU and the IMF.
The Bank of Cyprus will continue the property auctions in Limassol and Famagusta District whereas other banks, such as the Cooperative Central Bank and Hellenic Bank will follow suit.
There are about 3,000 foreclosures in the pipeline which have been pending at the Land Registry Department for years. Banks have been signalling publicly that primary residences are not the target, but they are going after commercial buildings, holiday homes, and land owned by large debtors.
The cases in the first wave of auctions concern foreclosed Cyprus properties going back to 2010 and have nothing to do with primary residence. Cooperative banks are putting Cyprus Properties under the hammer with a total estimated value of €75 million, while the Bank of Cyprus is pushing Cyprus land and properties based on final court decisions prior to 2013 with a total value of €85 million. Hellenic Bank is also going after big commercial Cyprus properties, leaving primary residences off the hook.
The Cyprus Banks Association has publicized some of the locations already, but there are still details to be hammered out with other places. Based on law, auction halls must be confirmed in all districts before public sale begins in any of them.
Under the new legal framework a bank can auction a cyprus property at a reserve price of 80% of the current market price. If no interest is attracted, the bank can place the Cyprus property to a new auction with the same price while in a year's time from now it can auction the property with a new reserve price amounting to 50% of the current market value.
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