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After EU accession, Cyprus is no longer just another tourist destination
offering sandy beaches and fun. It’s becoming the home, work place,
business destination, retirement place for more than half a billion people
coming from all over Europe.
Furthermore, the government introduced a 15 % VAT on property purchases in
accordance with the “acquis communautaire”. All these lead to one and only
conclusion - property prices are only going one way and that is up!
Until now, a foreigner was allowed to buy as much property as she/he
wants, but was only allowed to transfer one house or one plot of land up
to 4,000 sq.m to her / his own name. But now most restrictions to
foreigner buyers are lifted which will lead to an increase in demand by
50-100% and generate an increase in both sale and rental prices. Louis
Constantinou, with his more than 30 years experience in the real estate
industry, believes that property prices could rise by more than 50 %.
“Until now, there was a rush to buy before EU accession and VAT
introduction. But freedom of movement after EU, will further increase
demand for real estate. Once restrictions are lifted we will have a new
wave of buyers coming here to live, work, invest or retire. That’s
millions of people coming to a small island with limited land resources!”
added Louis.
Jacob Clein, another real estate expert, agrees with Louis’ assessment.
“Prices will only go up. Cyprus is becoming a top destination for
retirement, investment, working and living. EU citizens prefer Cyprus to
other countries because they find it safer and friendlier. There is a big
interest on new properties. The relatively low taxation and low cost of
living in Cyprus has also an added appeal for potential buyers, offering a
full, but comparatively inexpensive lifestyle. ” he added.
All these will for sure increase demand for properties in Cyprus. But what
else could push up the prices even more? SIPPs (click here to read more
about SIPPs >>>) is definitely another factor. Cyprus is the one of only 3
countries to attract the £5-11 billion to be invested by SIPPs in
property.
VAT on land is also another factor. Cyprus has a transitional period until
2008 before imposing VAT on land and when this applies property prices are
expected to go up by atleast 5% only because of that. Also joining the
Eurozone (adapt Euro as currency) will contribute towards an increase of
demand since interest rates will fall.
So what does all these mean? Prices will increase gradually, at least by
50 % by 2008. The future remains to be seen but what we know for sure is
that now the prices of real estate in Cyprus are going up fast and will
continue going up even faster for sometime to come. So if you are
considering to buy a property my advice would be to first do your own
research and then find a reliable consultant to assist you in minimizing
any risks of a price stabilization.
Always, keep in mind that the best investment are properties on or near
the beach. Demand for these properties is very high, yielding both high
resale values and high rental return.
miria@interlinkproperties.com
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Invest in CYPRUS property market
