Napoleon Hill, the author of ‘Think and Grow Rich’ was once quoted as saying “opportunity often comes disguised in the form of misfortune, or temporary defeat”. The property market in Cyprus would seem to reflect these words!
Between 2003 – 2007 property prices in Cyprus increased an impressive 65% according to data from the Central Bank of Cyprus, but 2008 saw falls of up to 25% on some properties. There was also a drop of 27.9% on the number of sales completed between January to November 2008 compared to the same period in 2007, and a 60.5% decline in November 2008 alone.
A 2008 survey of 20 Cypriot developers carried out by StockWatch shows that 16 of the 20 are expecting further property price falls in 2009, and a number reported no sales at all in 2008! So does this mean that it is all doom and gloom for Brits who are in the Cyprus property market or who are considering buying a home in Cyprus? In this update on the Cyprus property market we concentrate mainly on the figures and statistics from the south of the island…
Remember Napoleon Hill – well if you’re a Brit with liquid assets, property in Cyprus actually currently represents a very good opportunity. Property developers have generally halted new projects and are desperate to get existing properties off their hands. Some of the developers interviewed within the StockWatch survey reported that following discounts of 15% on new development properties in Cyprus they were still unable to achieve sales and would need to consider further reductions. In other words, if you’re a cash buyer you’re in a fabulous negotiation position at the moment. What’s more, tourism in Cyprus remains incredibly strong, and the appeal of the island as a low tax retirement haven means that there is always desire for property in Cyprus – thus making it a very good long-term bet.
In terms of price reductions and buyers being in a good negotiating position, the same has been true for building plots and resale properties in Cyprus. With the lack of buyers coming to the market, prices are coming down and buyers with financing in place or cash to spend can negotiate excellent reductions on asking prices.
But it is not just buyers who can benefit from the current troubled times. Brits who already own property in Cyprus can also benefit. Whilst property prices have been falling, so has the value of sterling against the euro, so sellers who have enjoyed some of the spectacular growth over the last few years can still reduce their price for a sale and get out with a profit if they want to exit the market because properties in Cyprus are priced in euros. Although, holding property assets for at least the medium term will likely be a strategy that serves these homeowners better.
Further benefits for Brits buying property in Cyprus are the ongoing reunification talks between the Turkish Republic of Northern Cyprus and the Greece backed Republic of Cyprus. Property prices in the North of Cyprus are between half and a third as expensive as those in Southern Cyprus, and if the island is reunified in the future then prices of property in Northern Cyprus are expected to catch up with property on the Southern half of the island.
Despite assurances that title deeds in the Turkish controlled sector are secure, they are still viewed with some suspicion by some people. We would simply say that if you are buying property in North Cyprus, ensure you have a good legal team assisting you – and the same is true for property in the South actually because there are the exact same title deed disputes going on there!
There is due to be a ruling in the European Courts about property rights in Cyprus which should clarify the issue and may well herald a further property boom in Northern Cyprus property in time.