Property In Cyprus

By: Parag Sheth

ABOUT SOUTHERN CYPRUS

Cyprus is a fiercely divided island, with the Turkish contingent in the North and the Greek contingent in the South. A island of immense natural beauty and history, separated by an official United Nations border patrol, ensuring that there is no repeat of the disastrous battles of years gone by. The island is the third largest in the Mediterranean and has changed hands on numerous occasions over the centuries, with religious tensions at what many believe to be the natural border between Islam and Christianity.

While the South is more developed than the North, there is still a magical mythological feel to the landscape, having been touched by the Romans, Crusaders, Franks, Venetians and other conquerors in the years gone by - all leaving a little of the heritage and architecture. The landscape itself offers a sharp contrast between long golden sandy beaches, and rugged landscape, to the mountainous areas inland, offering something for everybody. Of the main cities, Ayia Napa is perhaps the best know, with beautiful beaches which stretch for miles, clear blue sea and a nightlife which takes in wild partying to a quiet stroll in the evening air. While the summer time is the most popular for the southern shores, the island offers a unique blend of winter sports on the inland mountainous areas. An island where you can be soaking up the sun on a golden sandy beach, and within one hour you can be skiing on the crisp white snow on Mount Olympus.

As the tensions between North and South have calmed in recent years, due in the main to the intervention of the United Nations, the number of visitors has increased substantial with property in Southern Cyprus very much sought after by overseas investors.

PROPERTY MARKET

In a country devoid of any period of stability for many years, it is not surprising to learn that economy has been very volatile to say the least. The country is dependant upon agriculture and government employment however as the area continues to enjoy a rare period of stability with the northern neighbours there is more interest from overseas investors. The mixture of culture, history, architecture and weather is a big attraction and tourism is set to become a major part of the future economy.

As a result of overseas interest, also helped by the recent entry to the European Union (and accompanying development grants) , the Southern Cyprus property market is enjoying its most buoyant period in modern times. Over the last few years we have seen Southern Cyprus properties increase in value by an average of 20% per annum, with further above average growth expected (in comparison to European neighbours). While the growth in property prices cannot continue indefinitely at current rates, it appears that the country is well set for both a period or economic stability and growth in overseas investment.

The country has received substantial interest from the British tourist sector, possibly assisted by the historical presence of the British military in the area for many years. Actual tourism numbers have been growing by 50% per annum over the last few years, and while there will be a slow down at some stage, the trend seems set to continue. This increase in visitor numbers is already having an impact on the price of property for sale in Southern Cyprus, as well as influencing growth in the rental sector.

WHY INVEST IN SOUTHERN CYPRUS?

There are a number of factors which make Southern Cyprus an attractive area to invest into, none more so than the beautiful weather which bodes well for the sun seekers. The area boasts some of the best weather conditions in the Mediterranean with approximately 340 days of sunshine annually.

The government of the island have taken a more proactive approach to attracting inward investment, especially since joining the European Union (in 2004) and the benefits associated with this. There are large fiscal incentives for overseas companies and individuals looking to direct funds to the area, not to mention a more e stable economy than seen in modern times.

The area has become a magnet for international banking and the oil industry, adding further weight to an expanding economy. The authorities have also seen a massive increase in tourism to the area, and are keen to encourage this still further, while attempting to retain as much of the original landscape, architecture and culture as possible. The country is also well positioned geographically, being central to three Continents offering further easy access to foreign visitors.

The average price of property in Southern Cyprus is some way below European counterparts such as the UK and Spain, and all properties made available to overseas investors is off-plan with the relevant permits and permissions pre-agreed. The area also offers a strong sell on market, with premium properties in Southern Cyprus in very short supply.

OUTLOOK

Southern Cyprus has seen an amazing change in fortunes over the last twenty years, highlighted by the potentially lucrative inclusion to the European Union. The World Bank has classed Southern Cyprus in the league of countries showing exceptionally high levels of income. Add in a growing economy (more under control than ever before), a flexible work force, political stability and an infrastructure development program gathering more and more pace and you have the potential for a sustained period of economic improvement.

The tax situation of Southern Cyprus is very amenable to the overseas investor with no capital gains tax laws, low legal fees and an easily accessible flow of finance. While the tourism market has grown substantially over the last few years, it is still relatively under developed compared to European partners. The government have shown an interest in attracting overseas investment, which as well as increasing activity in the economy, is also helping to lift the standard of living for all inhabitants.

The traditional dependence on agriculture for employment is slowly being eroded as the banking, services and tourism sectors continue to expand. As the country grows ever closer links with European partners there is an expectation that recent economic growth will continue.

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