29/01/07 - Cyprus Property Market Review

Friendly English-speaking locals, mile upon mile of sandy coastline and more than 300 days of sunshine each year combine to make Cyprus a haven for holiday buy-to-let investment. And EU accession in 2004 has only gone on to strengthen the market

Many Brits have a soft spot for Cyprus. And that’s hardly surprising considering that this Mediterranean isle has the complete summer holiday package. Friendly locals, sandy beaches, stunning scenery and over 300 sunny days per year all combine to make this something of a holiday gem. All of which explains why so many of us are looking to Cyprus for our place in the sun.

Although the majority of overseas buyers still come from the UK, other nations are beginning to get a foothold on the Cypriot property ladder. “Since its accession to the EU, in 2004, more countries have become aware of where Cyprus is and it has brought new purchasers from other countries,” says Anita Hopkins of Leptos Estates. “Cyprus now attracts investors from the Middle East and other European countries.” And with recent changes in VAT legislation (15 per cent on new properties), the market for VAT-exempt properties in particular is hotting up. “Many properties in Cyprus are still available without VAT – all properties filed for planning prior to May 2004 are exempt – and therefore purchasers are buying before the prices rise,” says Hopkins. She believes that there are several reasons why Cyprus should prosper. “The property market will continue to grow due to many factors. Purchasers like the legal system in Cyprus – it is easy to understand being based on the English one. The Cypriot Government also believes in looking after the environment – properties cannot exceed a certain height, density is monitored and green areas are planted within developments,” says Hopkins.

Paphos draws the majority of investors and, with the construction of mixed-use developments, should continue to be the island’s main hotspot. Neapolis, for example, will host a university, hospital, shops, businesses and residential areas. In the case of off-plan purchases, Hopkins advises: “When it comes to off-plan go and see some completed developments to see the standards the builders adhere to and make sure a full after-sales service is available.”

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