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Cyprus To Establish Special Arbitration Court For Economic Disputes

At the initiative of the Cyprus Bar Association, plans are underway to create a Special Arbitration Court dedicated to economic disputes. This initiative aims to significantly enhance both the judicial and economic landscape in Cyprus.

The proposal, which needs approval from the Ministry of Justice, the Council of Ministers, and the House of Representatives, will be officially implemented upon passing these stages. Michalis Vorkas, President of the Cyprus Bar Association, stated that the objective is to establish Cyprus as a regional centre for resolving economic disputes of any scale, without restrictions. This court will cater to foreign nationals with permanent residences in Cyprus or abroad, as well as Cypriots involved in financial disputes.

Mr. Vorkas emphasized that disputes will be resolved swiftly, conserving valuable court time. The arbitrators, chosen by the Cyprus Bar Association, will be specialized legal professionals from both Cyprus and abroad.

Economically, Cyprus stands to benefit as foreign nationals opting for the Special Arbitration Court will contribute foreign exchange and significant financial inflows.

The final decisions of the Special Arbitration Court will be recorded in the District Courts, thereby gaining full judicial authority.

Functionally, the Arbitration Court will resemble the Court of Arbitration for Sport (CAS) in Lausanne, an international semi-judicial body established to resolve sports-related disputes.

Cyprus Real Estate Set for Correction Amid Transformative Housing Strategies

Market Outlook And Economic Impact

Cyprus is bracing for a significant recalibration in its real estate market, with anticipated declines in both rental and purchase prices over the coming years. President Nikos Christodoulides, speaking at a Cyprus Property Developers Association dinner in Limassol, attributed these market adjustments to the influx of new housing developments poised to recalibrate supply and demand dynamics.

Robust National Initiatives

Addressing a distinguished audience that included Interior Minister Constantinos Ioannou, President Christodoulides framed real estate and construction as cornerstone sectors of the Cypriot economy—a realm that contributes 15 percent of GDP and sustains over 40,000 jobs. The president lauded the association for its constructive role, affirming that public-private cooperation has enhanced the nation’s resilience and competitiveness.

Targeted Housing Policies

Central to the government’s strategy is the national housing policy, which seeks targeted measures to alleviate housing shortages by boosting affordable unit production, especially for the younger demographic. Initiatives such as the national strategy ‘Stegazo to Mellon mou’ and the Build to Rent scheme are already showing results. These programs grant developers a 25 to 45 percent bonus in building coefficients in exchange for dedicating new units to the affordable segment.

Streamlined Development And Regulatory Reforms

In parallel, government reforms are set to accelerate the permitting process, with approvals for urban planning and building permits now targeted at 40 working days for low-risk and 80 days for medium-risk projects. Additionally, a forthcoming bill on jointly owned buildings signals a proactive approach to resolving long-standing management disputes, further positioning Cyprus as an attractive destination for sustainable real estate development.

Beyond Real Estate

President Christodoulides also highlighted other transformative measures, including the launch of a Business Support Center designed to boost public sector efficiency, and outlined the ambition to complete all necessary technical specifications for Schengen Area accession by the end of 2025. These initiatives collectively underscore the government’s commitment to enhancing both the domestic investment climate and broader economic productivity.

Short-Term Market Trends

On the demand side, the Central Bank’s House Price Index has already flagged a slowing trend from the third quarter of 2024. With strong public and private sector engagement, Cyprus anticipates this deceleration to persist, ensuring that new housing supply ultimately leads to a more balanced market and a reduction in property costs.

In summary, these strategic reforms, supported by robust governmental initiatives and market-driven collaboration, signal a pivotal moment for Cyprus. As enhanced housing supply meets its counterpart in demand, the long-term outlook for a healthier, more sustainable real estate market appears well within reach.

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