|Cyprus as an EU Member and property|
Cyprus is part of the European family since May 2004. So how did this affect the prices of properties in Cyprus?
The answers are very clear and can be seen in the price indices from may 2004 up to 2006. The prices have risen by more than 50% since May 2004 in total. The reasons are due to the following facts:
1. Construction costs have risen.
2. Cost of land has increased by more than 30% as a result of increased demand
3. The demand of properties by foreign investors and second home hunters has increased since it is a safe long tern investment in a nice and safe environment
4. Demand by other buyers has increased as a result of a 'catching the train' thinking , before prices get too high
5. VAT on property prices has been implemented for any new build properties which got a planning permission after May 2004.
6. South Cyprus is increasingly seen by more people as one of the best holiday destinations as well as a same place for investment. Please be aware that North Cyprus is not a safe place to invest.
Due to the combination of the above reasons, prices of properties in general have risen. It is furthermore expected that prices will rise by another 50% by mid 2007. Then it is estimated that there would be a period where property prices in Cyprus will stabilise and possibly decrease since supply will be very high and investors will perhaps sell and cash on most of their investments. The cycle will continue with more increases on the prices again after a possible stagnation in the supply of newly build properties. The above are the personal opinion of the author and do not in any way constitute a recommendation for any investment.
by Livadiotis Paris BSc (Quantity Surveying) MSc (Construction Management)