Cyprus Mail
Cyprus

New drawback for old-town dream homes

Renovating an house in the old town is complicated

By Constantinos Psillides

BUYING a home in the historic centre of Nicosia’s old town is a dream for many people, but one that comes with a lot of complications.

Being near the urban beating heart might be appealing to most but is available only to those that can shoulder both the cost of purchasing such a prime piece of property and the cost of restoring it.

The state has always encouraged people returning to traditional urban areas, providing a number of incentives for those interested in buying and restoring houses as long as they are of enough historic interest to be listed.

So when Zoe Lordos, a Nicosia-based architect who has extensive experience in renovating old listed houses, recently  filed the paperwork for one of her clients seeking approval for a grant, she was surprised to find that the state has now introduced a new clause for applicants.

 Zoe Lordos
Zoe Lordos

While in the past the only requirement to receive a renovation grant was for the work to be monitored and approved by a competent committee, the municipality and the town planning and housing department, the new clause stipulates that the grant would only be paid, “if state finances allow.”

“I was taken aback when I was informed about this new development. Restoring an old house doesn’t come easy and a state grant it’s the first thing clients ask about when they contact an architect,” says Lordos, who believes that the new clause might act as a deterrent for those interested in moving to the old town.

While property prices have plummeted  islandwide in recent years, properties in old Nicosia have held up remarkably well and  properties on and near Ledra and Onasagorou streets, have actually boomed in value over the last five years, by up to 25 per cent.

New life has been breathed into this once derelict area, mainly due to commercial activity. The people soon followed and restoration grant requests started flowing.

Lordos credits mayor Constantinos Yiorkadjis with kick-starting the old town’s current revitalisation, pointing out that his decision to abolish the parking requirement for businesses within the old town ushered a new age for the once-struggling businesses. The rise in commercial property values subsequently triggered a rise in housing property values.

A renovated old house
A renovated old house

According to the town planning and housing department, at the height of the old town property boom in 2010, the state doled out around €12 million in restoration grants.

But did the booming market drive the now cash-strapped state over the cliff?

An official with the department said this was not the case.

“Nowhere, in any meeting, has anyone ever even considered slashing the restoration grants, let alone abolish them. I assure you, the only time when we won’t be giving out grants for restoration purposes is if the country goes bankrupt, in which case all of us will have bigger fish to fry,” said the official, who wished to remain anonymous.

The Sunday Mail was told that the reason the new clause was introduced was so that applicants realise that the state will not be paying all of the money as soon as their applications are processed, like in the past.

“After the financial crisis hit there was pressure to get our financials in order and save money where possible. So we now prefer to pay the grant in installments. This has led to a misunderstanding among both architects and applicants. They make plans under the impression that they will get all the money at once but this is hardly ever the case now. So, in order to avoid confusion, we just wanted to make sure that people understood that they wouldn’t be getting all of the grant money in one go,” said the official, once more assuring that under no circumstances would the state refuse to pay for restorations that meet the requirements set by the housing department.

features constantinos

Besides the cash grant – capped at €90,000 – the state also provides a second incentive; selling off  to building developers any excess building co-efficient, commonly known as ‘space’, or in Greek ‘aeras’, which can be increased by the municipality upon request.

The building co-efficient on listed properties is an owner’s theoretical right to extend their house which they do not have in practice because they are bound by law both to keep to the height limits of buildings in the old city  and to maintain the historic characteristics of the original property. Developers in areas not bound by these restrictions can buy this space to add extra storeys to their developments. It’s rather like selling thin air.

While the construction market was still strong, selling the building co-efficient was a great way to cover some of the restoration cost. Sadly, this is not the case in post-crisis Cyprus.

“We could not have managed without the help we got from the government,” said Rachael Theodoulou who renovated a house with her husband in old Nicosia in the mid-2000s.

“Both the grant and the right to sell our building co-efficient were crucial.”

The couple were renovating their house between 2004 and 2006 at the height of the building boom when contractors were in demand and could set high prices for renovation. Theodoulou acknowledges that those high prices meant the grant did not go as far as it would now when a depressed building market forces contractors to keep prices competitive.

“But at least we got the grant immediately after the town planning and municipality signed off on the work we had done,” she said.

Another advantage was that back then selling the building co-efficient or ‘space’ was relatively easy as building developers were eager to buy. The couple sold much of their space to a developer working on a project in Ayia Napa.

“Developers would always try and push prices down, of course. But still, it was much more of a seller’s market, “she said. “What developer would want to buy now there is no building going on? What developer has money? I feel very sorry for people trying to renovate old houses now.”

Lordos also holds that things are tougher in the current market. “Indeed, now is far more difficult to sell your building co-efficient. It used to be that developers were eager to get their hands on those co-efficients and paid handsomely for them. Not anymore.”

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