Since joining the European Union (EU) in 2004, Cyprus has been enjoying a major boom in its property market. Despite the unresolved issue of the division of the island between the Greek south and the self-declared Turkish northern republic, the island’s myriad appeals have helped draw the investors in by their thousands.
Low prices, lots of new locations to be discovered, plenty of sun, sand and surf, history and culture, all allied to a familiarity with British customs and traditions which has helped generate a large ex-pat community, have been cited as reasons that southern Cyprus has enjoyed such success since 2004. Now, with the country having just adopted the euro, many expect that even greater monetary and fiscal stability could lead to further growth. Paul Collins, overseas property editor of BuyAssociation, said as much last week.
Yet there is also an internal factor in the growth. Outside investors may see the climatic, scenic and cultural appeals of Cyprus as a good reason to invest, either as a place to emigrate to or as a holiday destination in which to invest in property for the buy-to-let market. But there is also evidence that the government of Cyprus has a very good reason to keep on encouraging investment.
This comes in the shape of new figures from the Cyprus Inland Revenue today which show just how lucrative overseas investors are to the government. The tax revenues in the first eleven months of 2007 were up 43.3 per cent on a year before, a figure the Cypriot Financial Mirror attributed to the property boom. This resulted in an extra €549 million (£409 million) ending up in the coffers of the Cypriot treasury.
With such economic benefits from overseas investment, it may seem reasonable that the policies of the government will continue to seek to encourage investors, with the populace at large also having good reason to be happy about the incomers given their potential gain in terms of schools and hospitals, not to mention the potential growth in tourism which can go hand-in-hand with such a property boom.
Cyprus has apparently enjoyed a smooth transition to the euro so far, with Dow Jones reporting this week that the European commission were happy that the island, along with Malta, was moving ahead well with the adjustment, which involves both the euro and the Cypriot pound being legal tender until the end of January. It stated the process was going “very smoothly and without any noteworthy incidents“. Barring any very noteworthy incidents, Cyprus should be set well for the future as a successful property market.