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Cyprus Property Market Set to Boom, say Experts

CYPRUS is among the three EU countries – with the UK and France – where property is set to boom in 2007, with price rises of up to 15%, according to property specialists Assetz. They say the island is among the established property markets, which will be the hotspots for 2007, while emerging destinations such […]

CYPRUS is among the three EU countries – with the UK and France – where property is set to boom in 2007, with price rises of up to 15%, according to property specialists Assetz.

They say the island is among the established property markets, which will be the hotspots for 2007, while emerging destinations such as Bulgaria and Croatia are set to cool.

Local experts see the local property market booming with steady increases for the year, before it stabilises for a while with all types of property in Cyprus, including plots, flats, houses and offices affected.

Estate agent Evripides Lemonaris told The Cyprus Weekly that flats and houses will see increases of 10%-15%.

“Land is set to see even higher increases this year, up to 20%-25% due to the prospect of the introduction of VAT on plots of land in 2008. Expected demand this year is set to put prices up,” Lemonaris said.

He also sees an upward trend for office property, which has been through a decline.

“The demand for office property from large foreign companies, including banks and local organisations, for mainly large buildings, means the office property market is set to reverse its slump of the past few years,” Lemonaris said.

He said the only problem faced in the local property market now is a slump in the rented accommodation market, mainly flats, which is happening for the first time in many years, due again to supply and demand, with too many flats and houses available for rent at present.

Urban areas

Property expert and project manager Antonis Loizou, said that the property scene on the island is set to see a boom with an expected increase of up to 10% at least for most properties.

According to Loizou, land and development projects in urban areas will see an increase of around 12% while areas near towns will go up 15%.

Nicosia office property, Loizou said, would see an increase of at least 20%, as a result of demand, and this goes for old and new buildings.

Beach land is also set to see an increase of 20% and land near the sea front will go up, at least 15%, Loizou said.

The free Famagusta area, including Paralimni and Sotira villages, will increase by 20% and property in Larnaca 10% as result of over-supply.

Warehouses and establishments that are not so pricey will go up 15%, while expensive property, especially homes, will go up 5% and the not-so-expensive ones 10%, Loizou said.

Holiday homes in tourist areas across the island which are not near the sea front will go up 15% and land outside tourist zones will increase between 15%-20%, he told this newspaper.

Loizou agreed with Lemonaris that plots of land would go up by at least 20% as a result of the changes in local planning provisions and the prospect of the introduction of VAT next year.

The main reasons for the overall increase in the local property market his year was supply and demand, due to low interest rates (only 4%) in deposit accounts, foreign demand for property on the island and the change in the mentality of locals, who now prefer to buy property than live in rented accommodation.

Loan facilities

“The facilities given by banks, with up to 30 years for paying back, has made Cypriots to want to buy a home and sell it at a later stage for an even better one, rather than live in rented accommodation, “ Loizou said.

Loizou and Lemonaris thought emerging markets like Bulgaria, because of its EU accession, would see a bigger increase in their property market prices, around 30%-40%.

International property market analysts say property in Spain will level off this year, with no increases, Germany will be stable and the UK will see increases of up to 10% in London and 5% elsewhere.

Copyright © Cyprus Weekly 2007

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