Investing in Cyprus
Market Review

Cyprus is a new market, and is already very popular. In May Cyprus joined the European Union and that means alignment with European laws and directives

For this reason the Cypriot Economy has been opening up to foreign investment. Income tax has fallen and the property market in general has seen increases of 10 –20% per annum over the past three years. It is a young dynamic market and reacts quickly to changes.

The level of interest in the property market had doubled in the past year and analysts expect it to rise further once restrictions on foreigners buying property in Cyprus are lifted. Due to the lengthy building process demand for property is exceeding supply in many categories and regions of the Island but nevertheless prices are still much lower than the UK and Spain.

A large number of factors could make prices shoot up further. Accession implies a solution to the political problem, which immediately makes Cyprus a more attractive market. Furthermore once the restrictions are lifted, foreigners may buy more than one property and work here before they retire, bringing a younger generation of buyers to the island, while investors are free to buy and rent properties as they please.

Increased demand for property in Cyprus would cause prices to shoot up in seaside resorts and tourist areas

It is currently the only country where a foreigner can buy a house, and have the right to live here as long as he doesn't work. After five years they can apply for citizenship, which will eventually mean European citizenship. With EU enlargement, Cyprus will no longer be just another tourist destination offering sea, sand and sun. It will become a place to work, raise a family, do business and retire… for a potential half a billion people.

Property analysts believe that property prices could rise by 30 to 50 per cent in the next years. There will be a huge rush to buy before VAT (15%) which was imposed on new planning permitions affects prices. But the freedom of movement and labour that comes with EU accession will increase demand for real estate considerably. At the moment, only foreign retirees buy property for their own use. Once restrictions are lifted we will have a younger generation of purchasers wanting to work here, investors buying up houses and leasing them, companies investing provident funds, and eight new member states with no sea and sun. That’s millions of people.

Cypriots, British, Irish and other North Europeans have already seen the potential: Older and lower end priced properties have been swept off the market.
As with any market, movement always starts at the bottom and works upwards to higher priced properties usually in line with rent increases. Rents will certainly go up with the increased influx of permanent & tourist traffic.

The Cyprus Land Registry Office is an effective body which has been one of the major reasons why Cyprus property has been a successful and safe investment. Current Property prices are reasonable and quality of properties extremely high.

All the facts lead to only one conclusion that real estate prices are recommending a strong buy. Cyprus has all the potential of becoming a secure business and pleasure destination, the European Switzerland of the Middle East.