Residential properties in Cyprus sold under foreclosure in the final quarter of 2024 lost significant value, with six primary residences auctioned off at an average discount of 26.7 per cent from their market worth, according to data from the Central Bank of Cyprus (CBC).

These sales took place through two rounds of auctions conducted between October and December 2024.

The total market value of the six homes reached €1.2 million, yet the combined selling price amounted to only €878,000.

In the first auction round, four homes with a collective market value of €381,000 were sold for €357,000.

The average sale price per home in that group stood at €90,000. Two additional homes, auctioned in the second round, had a combined market value of €805,000 but were sold for €521,000, averaging €260,000 per unit.

This decline continues a trend observed in the previous quarter, when five primary residences were sold through foreclosure for €862,000, down from a combined market value of €1.2 million.

These transactions raise renewed concerns about the financial impact on borrowers, especially given the legal safeguards intended to regulate foreclosure pricing.

Under existing legislation, properties must initially be offered at a reserve price no lower than 80 per cent of their appraised market value. If the property remains unsold for 12 months, the reserve price may drop to as low as 50 per cent of its estimated worth, depending on interest from potential buyers.

Despite legal reforms introduced over a year ago to protect borrowers, many are still failing to utilise the tools available to them.

These reforms included the expansion of powers granted to the Financial Ombudsman, aiming to facilitate out-of-court mediation between borrowers and lenders.

Borrowers can now apply for mediation if their original loan amount does not exceed €350,000 and the collateral is either a primary residence or professional premises worth up to €350,000.

Even those with terminated loans under the same thresholds can seek mediation within six months to prevent foreclosure.

Additional provisions allow borrowers with loans up to €350,000 secured against professional premises valued at up to €750,000 to also request intervention.

Nevertheless, utilisation of these options remains limited. At the same time, lenders have continued with foreclosure proceedings.

During the last quarter of 2024, banks and credit acquisition companies sent 530 letters informing borrowers that their primary residences would be put up for auction.

These notices included 495 homes valued under €350,000 and 35 homes exceeding that threshold.

In addition, 282 formal auction notices (type IA) were served, specifying auction dates for mortgaged properties.

Of these, 235 related to homes worth under €350,000 and 47 were valued above that figure.

Three properties were eventually sold to third parties following failed auctions.

Another 27 primary residences were purchased by mortgage lenders six months after unsuccessful initial auctions.

Foreclosure activity increased overall by the end of 2024. According to central bank figures, 239 mortgaged properties were sold during the year’s final quarter, raising €22.9 million.

This marked a rise from the 186 properties sold in the third quarter, which had fetched €32.6 million.

Among the 239 properties successfully auctioned were 45 incomplete homes and apartments worth €7.5 million.

Eighteen commercial properties — including offices, shops, factories, and agricultural facilities — were sold for €1.8 million.

Another twelve plots of land brought in €1.9 million, while 117 agricultural fields and parcels fetched €3.4 million.

In the second round of auctions, 41 properties were sold. These included ten homes worth €1.7 million, seven commercial properties for €2.3 million, three land plots for €781,000, and 17 agricultural parcels valued at €1.7 million.