Buying A Property In Cyprus

Cyprus is a perennial favourite with British second homebuyers. The island in the southern Mediterranean regularly features in the top 10 of countries where we buy property. Should you buy there?

By Gordon Miller

The reasons for the popularity of Cyprus are year-round sunshine, English is widely spoken, driving is on the left, as it is in the UK, and an advantageous tax regime makes it an attractive relocation prospect for retirees. (Foreign pensions are set at a maximum taxation of 5 per cent.)

The property market has experienced a boom over the five years running up to the end of 2008. EU accession in 2004 and adoption of the Euro as its currency sparked house price increases of more than 100 per cent over the half decade. The average house price in Cyprus is now EU187,053 to the end of the first quarter of 2009, according to MAP S.Platis, a leading Cyprus real estate agency.

The peak for house prices was reached in November 2008. The average house price has since fallen 2.17 per cent (-3.22 per cent in real terms) year-on-year to the end of March 2009. The house price crunch has been attributed mainly due to lower demand from British buyers who comprise around 70 per cent of foreign buyers in Cyprus.

The biggest homebuilder in Cyprus, Aristo, recorded a 41 per cent decline on sales during the first 10 months of last year alone. But Cypriot developers are fighting back with innovative schemes to lure buyers to their shores. Leptos Estates is offering a home exchange scheme that, subject to valuation, means you too could swap your old place in the UK for a brand new property in Cyprus. The scheme is available at several developments, including Limnaria Gardens development, located in the prime residential area of Kato Paphos. Prices start from EU170,690 for a one-bedroom property.