Cyprus: Land & Property Boom?

In January 2008, Cyprus will be introducing a 15% VAT rate on land. Since the announcement of the new law, Cypriot land has increased in desirability and demand for land has shot up.

During the start of the second half of 2007, prices for Cypriotic land have shot up – some land-owners have discovered that they are now millionaires thanks to the new law. Not so long ago, land ownership was considered an almost worthless asset – now, it is pure gold-dust.

With Cyprus expected to join the EU in January 2008, it is expected that Cyprus property prices will also start to dramatically increase, making this the perfect time for property investors. Southern Cyprus has already seen property price increases of around 20% a year for the past couple of years, and it is expected that these percentages will increase by another 10 points to around the 30% figure after Cyprus has become part of the Eurozone.

Cyprus is a fairly small island meaning land sales and property supply is unlikely to increase in the near future. This all means that if the country becomes a desirable place for foreign property investors, prices will increase even further as demand starts to outstrip supply.

However, to counteract bubble, the Central Bank of Cyprus recently changed it’s mortgage criteria – residents must now find a 420% deposit should they wish to purchase and property, and non-residents must find a 40% deposit. This move is aimed at keeping the property market from expanding at too fast a rate. Despite this minor set-back, Cyprus looks like a hot place for property investors who are looking to make either short-term or long-term investments. Short-term, land looks like a good option if there is an easy way to offload it before the new VAT rules come into play, and long-term, the housing market looks set to rise giving good ROI for investors.

If you are looking to buy property in Cyprus, we suggest taking a look at our free buyer’s guide.

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  1. R.Briggs. | Jan 26, 2011 | Reply

    Noting the horror stories involved in “buying” Cyprus Property, ( please note the Cyprus Property News & the Cyprus Mail websites )I would not touch anything in Cyprus with a Bargepole!!

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