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28/06/07 -
Cyprus Property Market Continues to Boom |
The Cyprus property
market continues to boom with new investors discovering the island all
the time…
This year is certainly on course to be another property boom year. Cypriot
newspaper the Financial Mirror has stated that 2007 is on course to see 20
per cent property value appreciation.
Part of the trend is due to a rush to beat the imposition of a new 15 per
cent VAT land tax on January 1st 2008, but the tend is a longer term one and
some might observe that the imposition of a land tax indicates government
recognition of this, suggesting it believes it can pick up some useful
revenue without doing undue damage to the market.
Already, the paper notes, the government is making good money out of the
property boom, with capital gains tax receipts amounting to the equivalent
of $173 million in the first five months of 2007, compared with $62 in the
same period in 2006 (Cyprus adopts the Euro in the new year).
However, the paper states, Solomon Kourouklides, Chairman of the Cyprus Real
Estate Agents Association believes the increase is also due to high amounts
of property buying from overseas investors in coastal areas.
Helping the economy
Some might suggest that there is a negative element for native Cypriots, in
which locals are priced out of the market by overseas speculators. What in
fact is happening, according to an article in the Cyprus Mail at the
weekend, is that the sector is helping the economy at a time when other
aspects that involve foreigners - such as tourism - are in decline.
Moreover, it points out, mortgage demand is rising and it is the capital
Nicosia, not coastal towns such as Limassol and Paphos, which are seeing the
greatest demand of all.
As the paper puts it: "This is good news, making the market less susceptible
to the whims of foreign buyers, who can abandon Cyprus as easily as they
came.
It also means that local buyers - including first-time buyers - are finding
a way to lock into the property ladder, securing a stake in a sector of the
economy that is expected to see continued steady growth." In short,
investors can certainly feel no guilt about buying into the market, or fear
being resented for doing so.
Further growth potential
Instead, the paper adds, the amendments that actually need to be made to
ensure the market stays healthy are things like faster issuing of title
deeds and better redress for builders if work is not up to standard.
Notwithstanding those concerns - not unique to any one country - Cyprus
remains a country with further growth potential.
Part of that lies in the continuing attraction of the country for its
climate, history and culture, while the forthcoming adoption of the Euro
could provide the greatest boost, by providing the kind of stability that
will encourage investment and establishing the country in the eyes of Europe
as part of the social, political and economic mainstream.
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