Should You Invest?
The market is currently geared towards off-plan and new-build
purchases, for which prices are rising rapidly but there is very
little demand for re-sales (even off-plan). Indeed, the resale
market is virtually non-existent. Cyprus is therefore much better
suited to those seeking a second or holiday home, a retirement
property, or rental income, rather than a short term investment
property.
- Compared to the UK and Spain property prices in Cyprus have
remained relatively low.
- Property throughout Cyprus still offers value for money
compared to many European locations.
- The cost of living in Cyprus is reasonably low so residents can
enjoy a high standard of living.
- The country has a stable economy and the adoption of the Euro
in 2008 is expected to strengthen the economy.
- Expectations are to have 3.5 million tourists by the year 2010
which is good for investors looking to invest in an already up and
coming market.
- Properties in Cyprus have very low taxation costs compared to
other European countries like the UK.
- British investors looking to buy a second or permanent home in
Cyprus have the Double Taxation Treaty that exists between the UK
and Cyprus which allows a UK citizen to receive their pensions and
investment income in Cyprus, without being subject to UK taxes
Rental Yields
Rental yields in Cyprus are already relatively strong and they
are predicted to continue to improve over 2008. This is due to
several airlines aiming to offer low budget flights to Cyprus when
the new international terminal is built at Larnaca airport. With
easier access to the country at more affordable pricesincrease
tourism and demand for property will increase. This in turn means
property prices should rise along with rental yields, so investors
looking to invest should do so now whilst prices are low. Rental
yields currently stand at 3.8% - 5.5% across the country.
Price History
The resale market in Cyprus is virtually non-existent meaning
the country is much better suited to those seeking a second or
holiday home, a retirement property, or rental income, than those
seeking a short term investment property.
A recent survey by the holiday home website
holiday-rentals.co.uk showed the average rental period was 18 weeks
per year providing a 6.3% ROI based on an average purchase price of
£134,000 and an average rental rate of £470 per week.
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