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22 | Focus on Property
Northern
Cyprus
buying guide
circle6 Buyers are required to
obtain an ownership per-
mit, which can take a
while but they make take
occupancy whilst waiting
for approval
the island as well as all surrounding waters, considered overpriced and not an investment
with the UK controlling the remaining. Turkish option.
troops remained in the north, and a green line Northern Cyprus is widely regarded as less
circle6 The use of a lawyer is rec-
buffer zone was created by the UN. developed and more naturally beautiful than
ommended to ensure the
When the Turkish held north of the islands in the South, and has a profusion of beaches and
1983, it declared the region the Turkish mountain tracks. Investors have seen impres- title deeds are clear,
Republic of Northern Cyprus which is only sive price rises of around 25% over the past
recognised by Turkey. In order for Turkey to two years, boosted by those reacting to the
investors can expect to
achieve their aim of joining the European increase in tourism, and those expecting reuni-
pay around US$1,965
Union, the reunification of Cyprus must occur. fication and the benefits that come with it
Dimitris Christofias, the new leader of (MAP S.Platis, 2009).
Southern Cyprus, which is now part of the EU, Despite these increases, purchase prices are still
circle6 Foreign buyers are limited
is more pro-reunification than his predecessor in some cases 50% cheaper than comparable
Tassos Papadopoulos, and talks have begun. A properties in the South. Prices are also to new properties smaller
UN official said that the ongoing talks have favourable compared to the rest of Europe on a
witnessed real progress that is “very encourag- price-to-income ratio, meaning there is still
than one donum (14,400
ing” in April 2009. plenty of headroom for growth, and any fur-
sq.f.) or preexisting homes
For property investors, the main issue regard- ther rises can still be considered sustainable
ing reunification is the clarification of title (Global Property Guide, 2009).
on five donums (72,000
deeds, as there are concerns that Greek The TRNC government is taking steps to pro-
sq.f.)
Cypriots may eventually claim land that they mote property investment internationally. An
or their families originally owned before the article towards the end of 2008 in British daily
island divided. Therefore it is important to national newspaper, The Independent, summed
either purchase a property built since 1974, or up the growing interest in the region, “in many
circle6 Stamp duty is set at 0.5%
make sure the developer provides the correct areas you can find a villa with its own private
title deed. The signs for reunification are grounds, private swimming pool and three
encouraging, and property investors will cer- bedrooms for £150,000 or less. It’s fantastic
circle6 VAT is 5%
tainly benefit when the two sides agree. On value and build quality is high.” (The
14th April 2009, the Turkish Cypriot leader Independent, 2008).
Talat stated he expected a referendum for the With news emerging on the Disneyland devel- circle6 There is a land registry
countries to be held by early 2010 (SETimes, opment, golf courses and casinos being built,
14th April 2009). The property market along with the Turkish mainland set to join the
fee, set at 6%, reduced to
As trade and travel restrictions loosen EU, substantial growth is expected to occur. As
3% for first-time buyers
between the two sides of the island, and Cyprus is a former British colony, the majority
reunification talks gather pace, property of foreign buyers are British, but according to
investors have been increasingly looking to local estate agent reports, a number of wealthy
circle6 Real estate agents’ fees
the TRNC region. Russian investors are making enquiries about
The Southern portion has been on the property on the island, which typically leads to are paid by the seller and
radar for many years, with high tourism a boom in prices as it becomes an international
numbers meaning the coastline has been market with interest from cash-rich buyers
typically range from 3% to
saturated with concrete hotels and mass (Unwin Estates, 2009).
5%
resort developments. Property investment Since the start of the global downturn, 2009 is
in this region is considered by many to be likely to see a softening of price growth, to
long past its peak. Whilst there is still a about 10%-15%, but actual price falls are not (New York Times, April 2009)
market for holiday homes, they are generally currently forecast (Unwin Estates, 2009).
September 2009 Investment International www.investmentinternational.com
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