George Coucounis predicts that property prices in Cyprus will continue to rise in 2008, and there will be an increased interest in resales.
This year, two trends regarding Cyprus properties are expected: firstly, prices will continue to go up, with a slight decrease in the purchase of new properties to be constructed; and secondly there will be an increase in property resales in Cypus.
The new currency of Cyprus, Euro, is not expected to negatively influence the property market but it is expected to have a positive effect because of Cyprus entering the euro zone, a fact which offers stability, security and trustworthiness for every purchaser or investor. Further, the Cyprus market is still more attractive compared to other markets because of the island's good weather conditions, its geographical position, its small size and the security it offers as a place of temporary or permanent residence and work.
Another factor which positively affects the property market is the population increase and the funds invested in the property market.
Moreover, the easy way of reselling immovable properties without a title deed, i.e. by signing a cancellation agreement, obtaining the capital gains tax release, the signing of a new sale contract, the withdrawal of the old sale contract and the deposit of the new one at the District Land Registry, without paying any Registry fees, is a motive for the resale of properties.
This year, the towns of Cyprus seem to be the ones having the biggest share in the property market, where the neighbourhoods and central areas continuously change through the demolition of old buildings and the construction of new ones. The increase of the prices in the towns will obviously be higher, because people want to reside and invest close to their work place and also because of the demand being higher than what the market offers. The new buildings will be suitable for use as residence and for work purposes. There are businessmen - developers who buy whole blocks in the towns of Cyprus in order to demolish the buildings therein and develop the areas.
Another factor for the aforesaid increase of the prices of properties in towns is the construction and operation of shopping malls not only in Nicosia but also in Zakaki, Limassol and in the other towns.
The number of new buildings and those expected to be built as well as the easy way of obtaining a long term loan with favourable terms, are factors which offer a lot of opportunities to the local and foreign purchasers for making a good purchase and investment.
The purchase of land is also a profitable choice for both development and investment purposes. There will also be observed soon the development of agricultural land as estates even with the present planning restrictions; there is a possibility for amending them under the pressure exercised by the people, a fact that will benefit the property market. Amendments concerning the town planning regulations are also expected in order to allow the construction of more floors in new buildings, a development which will result in land saving and an increase in the offer of new apartments/offices. The initiative of foreign investors purchasing land in selected areas of Cyprus in order to develop them and construct expensive and luxury villas, will attract well-off purchasers and bring more benefits.
Despite the above positive expectations, the people contributing to the property market, businessmen and developers will now have no other choice than to build attractive and high quality buildings, which will provide more comfort and many amenities useful to the more demanding and interested purchasers. It would be good for the property market to see such unique, new buildings which will not be similar to the existing ones.
The construction of properties with nearly the same type of plans and without a character of their own must be avoided. On the other hand, attention must be paid on high quality work, the use of good materials and the finishes.
Among other factors which will positively affect the immovable property market in Cyprus are the special subsidy provided to the people entitled when purchasing or building their main and permanent residence in lieu of the return of VAT, the refund of the immovable property tax paid after the transfer of the property and the reduction or abolishment of the Land Registry fees and of other taxes when VAT will be introduced on land.
So the Cyprus property market continues to prosper, especially now with the Euro in hand.
George Coucounis is an experienced lawyer practicing in Larnaca, Cyprus.
Educated at University College (London) and Thessaloniki University (Greece), George is fluent in English and has been practicing law in Cyprus since 1982.