My Property Investment – Why I Chose Cyprus
Posted on 17. Feb, 2009 by Jane Sait in Buying Abroad, Investing Abroad, Lifestyle Abroad, Owning a Property Abroad, Relocating Abroad, Renting Your Property
As you may be aware from my previous blogs, me and my partner took the plunge a couple of years ago and purchased our first property overseas. We bought an off plan house in a village location close to Paphos in Cyprus. As yet we are still awaiting for the property to be delivered. Sadly the completion date was put back a few months and is now due for completion at the end of September 2009. Delayed completion dates are one of the pitfalls to be aware of when purchasing off plan. It’s annoying but sometimes unavoidable. Delays can happen for many reasons including water shortages, supply shortages, etc. The important thing is to purchase through a reputable developer who you can trust to compensate you for any costs incurred for delays. Please note it is advisable to make sure there is a clause in your contract for any delayed delivery dates.
With this in mind be aware that the property you are purchasing may not be delivered by the time stated by the developer. This can be annoying especially if you specifically need the property by a certain date. For example, a plus for us when purchasing our property was that we intended to get some high season holiday rentals as the property was due to be delivered by April 2009. As our property is now not completing until autumn/winter 2009 I will have to wait until the summer of 2010 for the high season rental prices. This of course is an annoyance, especially with the monthly mortgage costs to cover, but at least I have the assurance that we have purchased through a developer who we can trust.
Hopefully this example will emphasis how important it is to use a developer who has a good reputation and an independent solicitor who has experience in the Country that you are purchasing in.
So why did I purchase in Cyprus?
I wanted a low risk medium to long term investment, a property that is likely to appreciate in value over the years in a popular tourist destination where we can cover most of the costs by renting it out to holiday makers. Cyprus was the ideal location for me. It is a sunny Mediterranean island, it has beautiful beaches, 2 international airports, superb golf courses and all year round good weather plus it is an established tourist destination. Cyprus is diverse and caters for a number of tourists; sun lovers, culture fans, golfers, water sports enthusiasts, walkers and mountain bikers, to name but a few, there’s even a skiing resort in the Troodos mountains which can be enjoyed for a couple of months of the year. Another plus for me was the improving infrastructure proposals; expanding airports, improved road systems, more golf courses and new harbour developments.These are just some of the reasons why we decided to purchase in Cyprus.
What are the developers saying?
Marc Debieuvre, R&D & sales support manager of Pafilia Property Developers says, “Property in Cyprus has become an even more attractive proposition with the current crisis around the world. Investment in shares, mutual funds area high risk, with even banks not being a sure bet. People are looking for more secure alternatives and bricks and mortar are obviously an attractive proposition. Cyprus still has all the advantages it has always had that have made it so popular, such as 340 days sunshine, very low taxes, low crime rate, first class infrastructure and very hospitable people. Visitors fall in love with the island and come back again and again. On top of this, it has a strong housing market, where the Central Bank has maintained strict levels on the amount of deposit a customer has to pay, reducing the exposure to speculative short term investments; a key factor in other countries’ problems. Today, the banks here are offering loans of up to 80% of the property value which is very attractive compared to other countries where loans are quasi impossible to obtain. Cyprus also has one of the most secure land registries in the world. If you add to all of this that we are an island with a limited supply of land and housing and a forecast for continued positive GDP growth (most countries are showing negative GDP) then you can see that there will still be room for gains in 2009. According to Assetz, capital appreciation for residential properties in Cyprus for 2009 is projected to be around 16%.
As ever, there two very important things to remember – always buy from a reputable developer and always use an independent lawyer when purchasing your dream home or investment”.
Conclusion
If you are considering purchasing a property overseas make sure that you take some time out to work out what is important for you. For me our priorites were medium to long term. I wanted a country that I loved somewhere where I would enjoy holidaying myself. I knew the type of property I wanted, how many bedrooms and the quality of the build. I didn’t want to get a villa with a private pool as I did not want to stretch my finances too much.
Everybody has their own idea of what they want and what their budgets are. There are pluses and minuses to any Country. Make sure that you do your research thoroughly and that you seek advise from a lawyer who is independent to the developer before you make a committement.
In the meantime if you have any questions please email me cyprusholidaylet@yahoo.co.uk. As always feedback is appreciated.
NB I have created a group for Cyprus property investors or indeed Cyprus property speculators on facebook ‘I Love Cyprus Group’ . Please feel free to join the group.
3 Responses to “My Property Investment – Why I Chose Cyprus”
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The Property Dude
18. Feb, 2009
Dear Jane, I expect that many of your readers will wish that they had had this advice 5 years ago, choose your developer with care, analyse your objectives and use an independent lawyer, everything else is ‘fringe’.
smyth
18. Feb, 2009
I have to disagree Cyprus is exactly the same as the UK at the moment the situation is dire.Properties are not selling and the rental market is poor due to the weak pound.We have a property that has been vacant and on the market for sale for over a year in Paphos.Do not rely on projections for the future from eager sales teams and as for developers they will only be interested if you are dancing to their tune
Jane Sait
19. Feb, 2009
Hi Smyth, Sorry to hear that you’re having difficulties with your property in Cyprus. I do also agree that it would be naive for anyone to expect Cyprus to be completely unaffected by the global recession, as you will know from my previous blogs, and I apologise if this is the impression that I have given. However I do believe that Cyprus has been less affected than other countries as we can see from not only the predicted statistics but from last years statistics. Where as some countries property prices have been dropping, including the UK, the property prices in Cyprus have still been increasing, although at a much slower rate than previous growth. With the Euro having been at an all time high it has obviously had consequences to property. People outside of the Eurozones may be less likely to purchase at the moment as the exchange rate is not beneficial to them. Of course it does mean that if you have been lucky enough to sale the property the difference in exchange rate will give you a higher return on your property.
The developer whom I have purchased my property through has a dedicated after sales team, a resale property team and a rental team. This was one of the reasons why I decided to purchase through this developer as their business does not end with exchange of contracts. Another important factor in my purchase of property is location (close to Secret Valley Golf Course and Aphrodite Hills) and onsite facilities (3 x communal swimming pools, children’s play area, use of nearby gym).
Have you tried speaking to a letting agency based in Cyprus? They will be able to market your property to other Eurozones as well as the Russian rental market plus many will pay you your rental income in Euros which for obvious reasons will be beneficial to you.
Also you can upload your property (if you have not already done so) on the “For Rent’ and ‘For Sale’ section of this website. As you can see the latest properties uploaded onto the ‘For Sale’ section have gained some positive response. This service is currently free of charge.
My personal emphasis has always been on medium to long term investment. The day to make a quick buck on property seems to be well and truly over so if this is anyones intention please be careful. As I mentioned in the blog do your research and choose a country you like to holiday in yourself.
I wish you all the best for the future.