Real Estates Investment Opportunities in Cyprus
Are there real estate investment opportunities in Cyprus? Is now the right time to invest?
Since 2008 the Cyprus economy in general and its real estate sector in particular have been facing challenges since as a result of multiple waves of crisis, starting with the global financial meltdown in 2008 and followed by the European periphery sovereign debt crisis in 2010-12 and more recently the Cyprus banking sector restructuring in 2013. These events have led to steep adjustments in real estate prices in some cases significantly over 50%. This has created unprecedented buy opportunities.
Despite the recent difficulties, the country retains certain unique features which ensure that in the medium term and long term, Cyprus real estate is simply not going to drop off the face of the earth:
- The country is ideally located on the crossroad between 3 continents; Europe, Africa and Asia (Middle East).
- Beautiful scenery with c. 350 days of sunshine and a mild climate.
- Friendly population and interesting culture with virtually no crime.
- Cyprus is a member of the Commonwealth and the European Union.
- Favorable tax regime with low corporation tax (12.5%) and a network of double tax treaties including one with Russia and China.
- The legal system is based on English Law which offers transparency, certainty and a business friendly legal framework.
- The land registry office is one of the most advanced in the world providing a safe and simple regime for protecting and transferring ownership.
- High level of education and services. Ninety percent of Cypriots speak English. 1 in 800 Cypriots works for a big 4 accounting firm. In absolute terms Cyprus has the second largest number of Chartered Accountants outside England after India
- Very good infrastructure which is currently being improved and an advanced telecommunication system.
- Plans are underway to increase tourism infrastructure and facilities on the entire island. A mega-yacht marina has recently opened in Limassol and there are similar plans for one in Paphos. Numerous special developments, such as golf courses and theme parks, are under way due to special incentive schemes provided by the government.
- Cyprus has advanced medical care with interesting prospects of becoming a centre of supply of health services and higher education.
In addition to the traditional strengths of Cyprus, there demand and supply fundamentals indicate that a recovery in the Cyprus real estate sector is imminent making this a unique time to buy at the bottom of the cycle and benefit from the ensuring recovery.
On the demand side, there are 3 factors providing impetus to demand:
- Since 2012, a growing number of Chinese have been purchasing properties in Cyprus. The number is estimated at 1,600 units sold. This is due to the policy allowing buyers of units in excess of E300K to obtain a Cyprus residence. This has been recently complemented with a policy allowing buyers of real estate in excess of E2.5m in value to obtain a Cyprus passport which is an EU passport allowing its bearer the right to travel, live and work freely in entire European Union
- The UK economy (traditionally main source of demand for Cyprus second home market) has been growing at its fastest rate in the past 5 years (est. 2.2% - 2.7% for 2014, well above the EU average), with UK house prices nationwide (not just in London) growing by 11.1% since May 2013 (in London growth was 17%), triggering hopes of a gradual return of the English buyer to Cyprus’ real estate scene.
- Natural Gas Reserves: Noble Energy has recently discovered substantial gas reserves (5 – 8 trillion cubic feet) offshore Cyprus which is anticipated to add further impetus to Cyprus’ economy with spill-over on positive effects on the real estate sector.
On the supply side, since 2008 there has been almost no real estate supply put to market, therefore, after 7 years of crisis any unsold inventories have been largely depleted.
WinWin Estates (and its main principal, Andreas Findiklis) is in a unique position to assist any real estate buyer or investor with real estate investments in Cyprus as a result of:
- Unique contacts. Having served as general manager of Leptos group (largest property developer in Cyprus) for 38 years, Mr. Findiklis has contacts and relationships with all main developers and banking institutions.
- Seasoned professional with negotiation, legal and finance skills to assist in re-structuring negotiations.
- Deep understanding of the sources of demand and the product that currently sells in order to assist with strategic repositioning of projects.
- Assistance with sales of second homes (unique global network of brokers to facilitate sales).
- Understanding of all zoning, permitting and regulatory issues.
- Expertise in development and construction (limited development/renovations maybe necessary even for mature cashflowing projects).
Published by Mr Andreas Fintiklis