[MGSA-L] Chinese Avghi ???

[June Samaras]

http://www.guardian.co.uk/world/2013/feb/06/cyprus-courts-chinese-property-buyers

Promise of visa-free EU travel prompts influx of Chinese to Cyprus
Securing permanent residence in EU country is major attraction for
Chinese property buyers in city of Pafos

John Hooper in Pafos
guardian.co.uk, Wednesday 6 February 2013 18.21 GMT

Pafos accounts for 90% of all properties in Cyprus sold to Chinese
nationals between August-October. Photograph: Paul Quayle/Axiom/Getty
One of the first things you see after landing at Larnaca airport is an
advert for a property development company. It is in Chinese.

It will soon be carnival time in the city of Pafos on the south-west
coast of Cyprus – and this year theme is China.

"Everything will be Chinese," says Pafos mayor, Savvas Vergas, in his
office in the pretty, whitewashed city hall, fronted by classical
Greek pillars. "Meals … folklore … Everything will be on Chinese
culture."

The carnival will be a way of celebrating a most unusual boom in a
country which, like others in southern Europe, has been stricken by
the eurozone crisis. Property prices in Cyprus have fallen by around
15% since 2007. Yet an official survey published last month found that
between last August and October more than 600 properties were sold to
Chinese buyers, 90% of which were in Pafos.

"The real growth came after August because that was when the
government made clear the terms and conditions for third country
nationals to get permanent residence," says Giorgios Leptos, a
director of the Leptos property group and president of the Pafos
chamber of commerce and industry.

The opportunity to secure permanent residence in an EU member state is
a huge attraction for Chinese because it offers them visa-free travel
throughout the union. Almost 4,500 miles away, Lisha Tang, a young
client at a Beijing property firm, is relishing the prospect.

"A house in Cyprus means travelling freely in Europe, which is great
for young people," she says.

And not just for young people – older Chinese who obtain permanent EU
residence can put their children into European schools and visit them
without difficulty. According to the 2012 Hurun report, 85% of China's
1.4 million dollar millionaires plan to send their children overseas
for their education.

To obtain permanent residence in Cyprus, investors from outside the EU
have to spend at least €300,000 (£260,000) on a property. They must
also prove that they have no criminal record and are in good financial
standing and agree to deposit €30,000 for a minimum of three years in
a local bank account. Their permit normally arrives in about 45 days.

Cyprus is not the only EU state to be exploring this way of
reinvigorating a stagnant property market. Last year, Ireland and
Portugal also offered residency to foreigners who bought property
worth more than a certain amount. In November Spain's trade minister,
Jaime Garcia-Legaz, said his country was intending to follow suit in
an attempt to clear his country's vast backlog of unsold homes.

For the European commission, the question of whether to grant
residence to non-EU citizens remains entirely a matter for national
governments. Conditions for the entry of investors into the EU are
currently not harmonised.

But François Godement, head of the China programme for the European
council on foreign relations, says: "I can see an issue cooking up
here."

"I see intelligent and talented young Chinese whose presence in Europe
might be to our benefit who run into problems when they try to stay.
Yet there are immigrant businesspeople who don't seem to have any
problems [in getting the necessary paperwork]."

But, he adds, "Where it really becomes a problem is where the country
granting residence is part of Schengen [the agreement on freedom of
movement of people]. That is quite problematic. That is going to raise
eyebrows in Brussels and elsewhere. Cyprus is not in Schengen. But
Portugal is, and so is Spain."

In the case of Cyprus, members of the buyer's immediate family can
also get residence, but a further €30,000 has to be deposited for each
one. That is almost as much as a Chinese citizen is allowed to take
out of the country in a year. But, clearly, ways have been found to
get around the restriction.

In Pafos, at this time of year, holidaymakers are thin on the ground
and the developments in which the Chinese have bought their properties
are mostly empty and locked. But the few who are staying in the town,
contacted by the Guardian through agents, were reluctant to talk.
Visa-free travel is not, apparently, the only reason for Chinese to
want permanent residence in Cyprus.

"Chinese people tell us they may be allowed to have a second child if
the child is born overseas," said Leptos. "And it offers them
somewhere to live if things go wrong in their own country."

It has been estimated that around $225bn (£144bn) a year has been
pouring out of China since worries spread about slower economic growth
and falls in the value of stock and property. Cypriot developers have
astutely positioned themselves in the path of this river of cash.

According to the China Daily newspaper, Cypriots were the most
prominent foreign exhibitors at last year's Beijing international
property autumn expo, taking 32 stands. Vergas says there were several
reasons why Pafos had been particularly successful in attracting
Chinese buyers. "It's a very quiet place with very little crime, and
it's different from Chinese cities because its character has been kept
intact. There are nice green areas and mountains nearby," he says.

"The Chinese also believe Pafos has a good future. Over the next 10
years there are plans for a new marina, a new port and a network of
new roads around the city. In 2017, it will be the cultural capital of
Europe. They believe it's a good investment."

Leptos says the influx of Chinese had enabled the city to buck an
island-wide trend. "There was a 15% increase in sales of property in
2012 – the first time they have risen for some years. And I expect
that, all things being equal, 2013 will be better than 2012."

Additional reporting by Daniel Parrott in Beijing

--------------------------------------------
June Samaras
2020 Old Station Rd
Streetsville,Ontario
Canada L5M 2V1
Tel : 905-542-1877
E-mail : june.samaras at gmail.com