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9 October 2015
by Channel 4 - "A Place in the Sun" on Friday, October 09, 2015 10:00 AM
Positive steps are being taken to sort out the property market in Cyprus and drawing the British buyers back.
After a rocky few years, Cyprus is putting its house in order to encourage the international investment it badly needs for its economic recovery. Despite the country’s banking crisis, the appeal of Cyprus remains strong, especially amongst British home hunters, and they are now slowly returning to the market.
Deep-rooted cultural ties with the island remain a big part of the pull – English is widely spoken, the legal system is the same and the comforting familiarity of driving on the same side of the road – coupled with 330 days of sunshine a year at the end of a four-hour flight.
It’s a small, user-friendly and hospitable island where around 70,000 British ex-pats currently reside, many of them around the hot spots of Paphos, Lanarca and Limassol.
With the euro currently at a seven-year low against sterling, there’s been an increase in UK property hunters keen to take “double” advantage of currency rates and low prices. Coastal properties fell around 20-35 per cent down after the global crisis – inland this figure is 40 to 50 per cent in the Paphos region.
“For the first time since 2010 the number of property sales in Cyprus increased in 2014 compared to the previous year,” says Graham Gurley, a recent purchaser in the Paphos region who is now helping other UK buyers.
“Official statistics published by the Department of Lands and Surveys, property sales in 2014 grew by 20 per cent to reach 4,527 compared with 3,767 in 2013. Of those 4,527 properties 3,334 were purchased by Cypriots while the remaining 1,193 were purchased by overseas buyers.”
Market confidence is clearly returning, helped by a real feeling that Cyprus is beginning a new chapter after an era muddied by corruption issues.
Hundreds of British and German buyers are going through the courts to recoup losses after misguidedly taking out Swiss-franc mortgages on their Cypriot homes during the property boom. With many developers going bankrupt during the global crisis, property owners have been unable to obtain the title deeds on their homes and cannot sell.
Cypriot Government Simplifies Property Buying Process
But under the new progressive Cypriot government is becoming a much safer place to invest, says barrister Stylianos N Christoforou of TCA Law, the counsel in Cyprus for UK-based legal services company Judicare.
“The government has laid down guidelines to expedite and simplify the process of obtaining title deeds. It is one of the procedures introduced to bring greater transparency in Cyprus. Add to this the fact that the Troika predicts that Cyprus will be out of its economic crisis by 2016 and things are moving in the right direction for buyers.”
Judicare’s founder, Neil Heaney, adds that the Cypriot government is also working on new laws to get liquidity into the bottle-necked housing market. “The market is being held back currently because the banks can’t lend,” he says.
“It’s a great time to buy if you are cash buyer but banks just don’t have the ability to loan. There are so many large developers who haven’t paid their mortgages but under new legislation it is planned that banks will be able to seize foreclosed properties and then sell them as assets. The result will be the availability of mortgages for buyers again.”
Meanwhile, the discovery of oil and gas in Cypriot waters is another factor already boosting the economy with global oil companies already setting up offices in the country – plus Cypriot tourism and air traffic were both up in 2014.
It was the same year that saw the on-time opening of the nation’s biggest infrastructure project, the €350 million state-of-the-art Limassol Marina that has really helped put Cyprus on the radar of high-end investors and wealthy yacht owners.
The fact that they can get Cypriot citizenship if they invest €5 million in the island also contributes, plus there have been plans reported for a Euro Disney and Europe’s largest casino.
In Limassol Marina - offering Cyprus’s first full-service superyacht marina in the Old Town, has undoubtedly been a big driver for investment. Over 80 per cent of the apartments have sold – 60 per cent too Russian buyers (prices from €450,000); but there are villas from €1,751,000 that come with a berth.
Outside the marina, you’ll pay €2 million for a quality, detached villa that you would pay €700,000 for in the Paphos region.
There are also some high-rise projects to note. Cybarco is also behind The Oval, Cyprus’s tallest commercial building at 75 metres in the heart of Limassol and nick-named “the egg” for its striking architecture.
Meanwile another leading developer, Pafilia, is designing the highest residential tower on the Med, 36 storeys high, on the seafront in the heart of Limassol.
But it’s Paphos that remains the most popular spot for British buyers. This region in the west of Cyprus has been well loved by the British for decades for its fantastic beaches, good infrastructure and authentic villages – all within an easy drive of the international airport. Paphos receives more enquiries for rentals than anywhere else in Cyprus, according to holidaylettings.co.uk.
Popular areas include Kouklia, Kato Paphos, Peyia, Sea Caves – a low-density area with lovely views – and Tala for its charming traditional square and its exclusive suburb of Kamares.
A little further north, Polis and Latchi are further rental hotspots abutting the beautiful unspoilt Akamas peninsula where high-end properties at Akamas Bay command around €1 million; or inland, there’s Aphrodite Hills, arguably Cyprus’s most successful resort, where luxury villas (starting around €700,000) sit between world-class golf, spa and equestrian facilities.
An excess of stock in many of the coastal developments translates into great opportunities to buy a resale apartment or villa at the bottom end of the market.
“The bottom of the market is moving again, with the average sale €80,000 to €100,000,” says Gloria Aubrey of Cyprus Property Services. “The exchange rate is helping enormously so it is good to see British buyers returning to the market – including expats based in Qatar and Kuwait.
“The UK pension reforms is another factor: recently I have had three couples discussing the fact they are thinking of spending their pension pot [now the over-55s can get their hands on a large tax-free lump sum of their private pensions] on a winter bolt hole that they can rent out for a few weeks to cover the community costs of the complex.”
She says the hot spots are Tala, Peyia, Sea Caves, Konia and Chloraka – all around Paphos – and slightly less so Latchi and Polis a bit further north. “Coral Bay is also popular but most of the things for sale there are leasehold as much of the land stiull belongs to the church,” adds Gloria.
She says that the Paphos area remains so popular because it doesn’t completely close down in the winter – like holiday resorts in the Protaras area – and because of the large British community resident there - there are around 30,000 permanent British residents in this region, and a growing population of Russians.
There’s a good choice of resale apartments if you have the sort of budget mentioned above, or detached villas with private pools if you have budget of €300,000 but if you want a brand new property, expect to pay more.
You can get a lovely two-bedroom villa in popular Tala for €189,000 or a three-bedroom villa in the attractive area of Konia for €239,950. Sea Caves tends to be a little more expensive; currently for sale in a three-bedroom 160m2 bungalow with a private pool for €375,000. The re-emerging new-build sector is targeting the higher end of the market.
It’s an exciting time for investors in Cyprus, but it is crucial that property-hunters do their research before parting with cash (and it does need to be cash as mortgages are still hard to come by).
Agents recommend negotiating hard after using the services of an independent lawyer to perform the due diligence on a property. Get your lawyer to check the check the validity of title deeds and whether the property is encumbered by a mortgage (taken out by the developer) - and avoid buying a resale property that doesn’t come with title deeds.
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