04/12/06 - The Property Market in Cyprus

Cyprus entices expats with its 300-plus days of sunshine annually and a famously low cost of living. However, now that it’s part of the EU, price levels have had an added fillip, and taxation and speculation are also stirring the pot. An interesting arena to watch over the next two years...

Cyprus is preparing to enter the euro zone, and in 2008 the government will introduce 15 per cent VAT on building land, in accordance with EU requirements. Estate agents are looking at the intervening period with some glee, and are hinting to investors that they should get their bids in before prices go up.
Old-fashioned restrictive rules on foreign ownership have been lifted, bringing an increase in sale and rental prices. Rates are increasing steadily, and some say that they will rise by 50 per cent or more in the next two years.

Some commentators, on the other hand, are expressing concern that supply is starting to exceed demand, and whilst the market is buoyant at the moment, it’s because there has been a certain degree of bandwagon-jumping on the part of landowners getting in on the property boom – which means there is a lot of choice for the buyer.

So don’t be strongarmed into signing just because you’ve been told it’s now or never. If you’re approaching the sale as an investor, weigh up both sides of these arguments before you make an offer. If, on the other hand, you’re one of the many who are simply after endless sunshine in one of the friendliest places on earth, you may already have put your own value on those things.

Another caveat, incidentally, is that only the internationally-recognised Greek Cypriot-controlled Republic of Cyprus is a member of the EU, and its property laws apply only to the southern zone. Unsurprisingly, this means that there are remarkable bargains to be had in Turkish-held Cyprus. However, there has been a well-documented test case in the European courts, with a claim being made on illegally sequestrated Greek property that has subsequently been sold on to Britons. Although reputable developers in the north do guarantee that title deeds are theirs to offer, this is an issue you should be aware of before making a decision to invest there.

View our Cyprus Property here...