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The Persistence of Cyprus

Article by - Assetz For Investors 13.3.09

With the credit crunch and subsequent world recession having affected many countries, discerning buyers may be particularly keen to ensure they are investing in countries and markets that are sound and possess the ingredients for long-term success.

For this reason, many will reassess their view of some markets that before the crunch were enjoying high levels of growth and investment, with booming prices making it tempting to undertake short-term adventures. Now, with the global economic situation exposing the weaknesses that exist in various countries, those keen to buy where the going is still reasonably good and likely to remain so may look around very carefully now.

Cyprus could well offer one such prospect. Firstly, its economic situation is better than that of many other countries. While the UK,Germany, Ireland and other countries are in recession and the eurozone as a whole is seeing its economy contract, the Mediterranean island nation is merely seeing its rate of growth slow down.

Speaking about this in Limassol in January, governor of the Central Bank of Cyprus Athanasios Orphanides - who is also a member of the governing council of the European Central Bank - commented that Cyprus is "doing relatively better than most other economies in the European Union", with growth projected to be 1.1 per cent this year according to European commission projections. While Mr Orphanides noted that this figure was a departure from the 2.9 per cent predicted by the commission in the autumn, it is growth nonetheless.

Similarly, the freshly-published Global Property Guide survey of house prices around the world last year showed an overall reduction in the rate at whichCypriotproperty values appreciated, down from an inflation-adjusted 15.25 per cent in 2007 to 1.01 per cent in 2008. Yet one might conclude that if Cyprus can keep growing when all about it are shrinking, the prospects may be sound ones.

Also this week, Off Plan Property Exchange suggested that the country will be one of the "best represented" at next month''''''''''''''''''''''''''''''''s A Place In the Sun Livepropertyinvestment show in London, highlighting the presence of Pafilia Properties and Britannia Developers as two of the firms taking part.

The Place in the Sun Live show will feature property from many countries, among which Cyprus is one that it regards highly. Its website states: "Cyprus is solidly Mediterranean and yet very British island - for while the sun beats down the locals are driving on the left, speaking English fluently plus many of its laws and customs will be familiar to Brits - making it an ideal place to own a place in the sun."

But for many investors, the combination of the historical British connections the island has, the weather and a market where prices have still risen despite the crunch, could all influence them to consider making the island their own sunny place.

Disneyland Them ParkAt Pyla

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By Nigel Howarth ″ January 13th, 2009

Recently reported- the Cyprus Government had announced plans to increase the number of golf courses on the island from from three to fourteen in an effort to help boost the numbers of tourists visiting the island.

Over the weekend, the Greek-language newspaper''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''Politis'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''' revealed the plans of four Russian investors who are looking to build a Disneyland-style tourist theme park at Pyla. At an estimated cost of €800 million the project would be the largest foreign capital investment ever made in Cyprus said Charilaos Stavrakis, the Minister of Finance.

The consultants working on behalf of the investors believe that the theme park will bring many benefits to Cyprus; it will create 3,000 new jobs and, more importantly for the economy, attract half a million high purchasing power tourists annually from the former Eastern bloc countries.

The proposed theme park will cover an area of some 600 donums (around 80 hectares) and could be situated in the UN buffer zone that currently separates the Greek & Turkish Cypriot communities.

The Russian government is aware of the plans and seems to support the project, particularly as the site proposed will allow it to exercise increased influence in the politics of the island. The Cyprus government is currently reviewing the application submitted by the Boema Group (who represents the interests of the Russian investors). If given the go ahead, the theme park will have two main entrances - one on the southern side and one on the northern and will have Turkish-themed attractions.

The park will seek to gain the reputation of being the ''''''''''''''''Euro Disney of the Mediterranean''''''''''''''''. It will include a 1,000 room five star hotel that will be shaped so that all the rooms have a view of the gardens. Plans for the theme park will include various attractions such as a water park, cinemas, theatres, auditoriums, stadiums - some of which will have closed roofs inspired by the Egyptian pyramids, a ski centre, waterfalls, adventure parks, shops, spas, saunas, Roman baths and a museum.

Plan of the proposed theme park at Pyla

The general theme of the park will be inspired by Greek mythology and the history of Cyprus and this will be reflected in the various rides on offer. The name chosen for the project, "Pygmalion and Galatea", is also taken from Greek mythology.

There are many difficulties to overcome before the project can be given the go ahead. Contacts have already been made with the interested parties including the UN, the government and the two mayors of Pyla; it appears possible that many of these obstacles can be overcome.

However, if the difficulties prove to be too great, there is a ''''''''''''''''Plan B'''''''''''''''' for the construction of the park on state-owned land at another location.

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The Cyprus Property Market and the Global Recession

Chris Calogirou (MBA)
of bestcyprusproperties-October2008

People keep talking about the hard times in the Property Market internationally. How far was Cyprus affected? How far is this going to go in terms of time? What will happen if the Sterling Pound does not recover soon? The answer is simple. When the whole world is suffering, Cyprus will also be affected. But what are the consequences…

In a geographically small market like Cyprus, it is amazing how much each area can be different than the rest. Take for example Nicosia. The capital of Cyprus has never been a popular destination among foreign buyers, retirees, holiday home buyers or investors. Its market has always relied on the locals. Local demand showed a marginal reduction but the market remains relatively active and stable.

Limassol traditionally relies on clients from 3 markets, the local, the British and the Russian. The market there was affected by the recession in the U.K., but most of the loss was covered by a relative increase in the sales to the Russians. Local demand also showed a marginal reduction but the overall picture remains positive.

Larnaca was "discovered" by the British buyers during the last decade or so. Although it is the base of the island''''''''''''''''s main airport, it has always had lower prices than the rest of the coastal areas. The drop in the demand from the U.K. has affected Larnaca. The same applies on nearby Famagusta. Both areas are trying to cover the reduced demand by promoting their product to Nicosia investors.

Paphos has been affected more than the rest of the island. Traditionally relying on the British second home buyers and the British retirees, the market there is now slower than before.

Prices…

According toobservations, little reduction has been observed during 2008.

Property prices in Cyprus are relatively inelastic. In the past, the contribution of land on the total cost of villas was around 25-30% and on apartments around 15-20%. The increase in the cost of land throughout the island has changed this. In 2008 the contribution of land on the total cost of villas is around 30-40% and on apartments around 20-30%.

This shows three things:

• 1. The profit of the developers has been reduced. It is dangerous to expect a real reductionin prices, although in some cases a marginal reduction is possible, especially among individual sellers.
  
• 2. Because of the size of the island and because availability of "building" land is limited, one cannot expect a reduction in the price of land.
  
• 3. Unless the recession in the international markets continues formore than another 12 months, a dramatic reduction in property pricesare notexpect. It is possible however, to see private sellers who wish to sell quickly, lowing their prices. But this will most likely bea minority.
  
  Although it is a hard time for predictions and an even harder time for optimistic statements, after dozens of reports received weekly, our feeling is that the property market in Cyprus will find its way, probably sooner than expected. The intention to leave the UK is stronger than ever and as soon as people "digest" the new exchange rates and accept the new realities, traffic from the UK will return to normal.
  

The impact of the strong Euro on the European (and Cyprus) property markets...

Since December 2007, the Euro currency has reached some record highs against the US Dollar and the Pound Sterling and inevitably the European property market, including Cyprus, has been affected. On December 19 2007, the GBP was worth almost Euro 1.40. Three months later, it has gone down to Euro 1.28. This is a real reduction of 9.4%, which means simply that property within the Euro zone countries has become 9.4% more expensive for the British buyer, all other factors being equal.

However, selling a property in Cyprus now and sending the funds back to the UK as sterling would have resulted in the opposite, you would have gained 9.4% in extra profit. The savvy investors who bought in Cyprus have another reason to be happy with their investment. Other reasons to invest in Cyprus, it is easy and all monies can be repatriated. The Euro could be overtaking the dollar as the world''''s major currency and become stronger in the future.

The Cyprus market has felt the impact of weak sterling because Britons are still by far the number one buyers on the island. However, in March the Royal Institute of Chartered Surveyors produced their 2007 European Housing Review, which reported an almost universal downturn in European housing markets - except for Cyprus where it has actually accelerated. (Source of proof)

Why is this? In part, thanks to the country''''s adoption of the Euro at the beginning of this year, which has increased investor confidence. In addition, developers across the island, along with private vendors, have recognised that to survive in such a market, they must cut costs, reduce profits & make prices more affordable.

Did they have a choice? Not really, most realised that this was the only way the market could survive, by stabilising and weathering the economic storm, so that it can emerge stronger in the future. According to research by Best Cyprus Propertieswhich compared prices in Autumn 2007 with current prices, it''''s easy to see that this had the desired effect. Prices have become stable and in some cases have decreased. As a result, the Cyprus Property Market is more realistic to the foreign investor, leaving room for growth & capital appreciation in the future. Cyprus property continues to be a good investment and a real possibility for people who long to relocate for a different lifestyle.

The fact that English is widely spoken and understood, driving is on the left side of the road coupled with low personal taxation are just some of the reason why one should really explore the benefits of purchasing a property either as an investment or as a home in Cyprus.Chris Calogirou
MBA

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July / August Edition - My Property Magazine

Why Buy Now?

• VAT will be introduced on land purchases in the near future
• The Cyprus Tourist Organization are currently offering financial support towards attracting conventions here in Cyprus. This will allow investors the opportunity to deliberate over future investment in medical and sporting establishments
• The completion in 2009 of the new airport will attract a large number of budget airlines to Cyprus
• Cyprus has an expanding golf industry
• Seven marinas across the island will connect Cyprus to the international yachting community
• Two new golf courses to be constructed over the next four years in the Famagusta area,offering year round usage, thiswill raise the numbers of tourists
• New 5 star marinas with superb facilities arriving soon
• Due to the shortage of plots in the Famagsta area, build factors have been reduced from 90% to 60%, 40% to 25% and 10% to 0%. This will secure a healthy market while guarenteeing the beautiful Cyprus landscape is preserved.

UK group presents plan for ''''green'''' resort on Crete

Athens, Greece 01 March 2007 10:17

British investors presented plans this week for a vast, all-season resort on the Greek island of Crete, describing it as a model of environment-friendly development and among the biggest investments ever on Greek soil.

The project, which includes golf courses, is to be built on land leased from a monastery.

"This is a resort with a difference," said Christopher Egleton, chairperson of developers Minoan Group while presenting the scheme covering 2 500ha.

"There''''s nothing like it anywhere in Europe, and I believe in the United States," he told a news conference in Athens.

The project, costing $1,6-billion, comprises six stone villages in the traditional Greek style offering five-star accommodation for 7 000 people in Cavo Sidero, a rural coastal area of eastern Crete.

Partially operational from 2009, the resort will feature a conference centre, sports facilities and golf courses whose water supply will be ensured by an on-site desalination facility, planners said.

"This is one of the greatest projects ever carried out in Greece," said Tourism Minister Fanny Palli-Petralia. "There will be complete respect to the environment and careful management of the local ecosystem," she added.

Built on land leased for 80 years from a local monastery, Moni Toplou, the "Cavo Sidero" project will occupy land protected under the Natura 2000 European network of key natural habitats.

Greek environmental groups oppose the creation of golf courses, which require huge amounts of water for maintenance. Many parts of Greece suffer frequently from drought.

United Nations environmental experts have expressed doubts about desalination, as the disposal of the salt can cause further damage to the marine environment.

But Minoan Group says it will work closely with Forum for the Future, a British charity specialising in sustainable development, to protect the land and local fauna.

"This is an area quite degraded from overgrazing," Forum for the Future chief executive Peter Madden told Agence France-Presse.

Construction is scheduled to begin in May.

The resort is expected to be fully operational by 2017, said the planners, who originally won an international tender for the project in 1995. -- AFP

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FROM: SUNDAY MAIL, January 20^th 2008

WRITTEN BY: Antonis Loizou

This year, two trends regarding immovable property transactions in Cyprus are expected: first, the 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 of the resale''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''s of all properties.

The new currency of Cyprus, the 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 islands 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 an incentive 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 neighborhoods and central areas continuously change through the demolition of old buildings and the construction of new ones. The increase of 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 towns in Cyprus in order to demolish the buildings therein and develop the areas.

Another factor for the increase in prices of properties in towns is the construction and operation of shopping malls not only in Nicosia but also in Zakaki, Limassol and in 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 favorable terms, are factors which offer a lot of opportunities to 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. We will also soon observe the development of agricultural land as ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''estates'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''', even with the present planning restrictions: there is a possibility of amending them under 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 off 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 whe 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. The Cyprus property market is prosperous, especially now with the euro hand.

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- GETTING CLOSER - PGA GOLF COURSE

Cyprus will soon boast its first golf course with PGA Golf Management in Larnaca and is set to become the jewel in the crown of the island''''''''s growing reputation as a golfer''''s paradise.

The recent announcement that work on the new golf course at Tersefanou village in Larnaca, which is to be managed by PGA Golf Management, will begin early next year was welcomed enthusiastically by all involved in this project. By addressing the issue of ensuring there is adequate water supply available to keep the course in the best condition all year round by the building of a dedicated desalination plant, the final piece in the planning puzzle appears to have been placed.

Interest in the resort, which will include fiver-star spa, leisure and sports facilities, with clubhouse and golf lodges, is already high as is demand for the magnificent real estate properties that will command views of this course.

Golfers are already flocking to Cyprus on a regular basis to take advantage of the excellent existing courses expected in the near future, the island is set to become a golfers paradise.

As those who have already visited will testify, Cyprus is an exceptional tourist destination, offering fiver-star luxury and fabulous cuisine. The island is also rich in history, redolent with mythology and with a stunning coastline. The decision to add top quality golf resorts had been warmly received by its regular visitors, and eagerly anticipated by the residents.

The Cyprus Golf Federation (CGF) was established in 2000 with the objective of promoting and managing golf on the island. The CGF adheres to the Council of National Golf Unions (CONGU) Unified Handicap scheme. If you have a valid handicap certificate from a CONGU, EGA or USGA affiliated club, then that certificate will be accepted by a Cyprus affiliate of the CGF. If you do not have a handicap or a valid handicap certificate, you will need to play for a handicap card.

Presently Paphos is the closest city to the established courses, which already boast some breath-taking holes, but the course at Tersefanou near Larnaca, by leading European golf course architects, European Golf Design, is tipped to eclipse them all. Picturesque Tersefanou has grown up around an elevated plateau in the outer district of Larnaca and offers sea and mountain views.

The area has already witnessed extensive development and offers all the amenities you could wish for. And at just a 10-minute drive to the beaches of Kiti and Pervolia, and only 15 minutes from Larnaca airport and town centre, its location is perfect.

Besides playing golf, the area also offers an array of other activities that will appeal to all the family. Within the resort, the intention is to create a high quality golf academy as well as a tennis academy and a football academy and an opportunity to go pony trekking. If you fancy venturing slightly further you can explore the many vineyards and sample local wines, or visit and number of historic sites. And if you still have the energy why not try a bit of retail therapy in the shopping districts. However, if all that seems like too much effort there is always the option of lazing in the sunshine and unwinding.

Artical: Property Views - Issue Two - pg. 6