Cyprus Property Market Outlook

Cyprus the third largest island in the Mediterranean has not seen many of the downsides of a slowing property market seen eslewhere in parts of Europe. Cyprus seems to be on a boom that does not seem ready to stop and with the island's ascension to the European Union and the restrictions being lifted for Europeans to live and work on the island, expat demand for property in Cyprus is expected to increase.

Southern Cyprus is favoured by retirees because of its hot, dry summers and mild winters – not to mention its preferential 5% tax rate on pensions and with English widely spoken this island makes for an ideal location from many aspects.

The Cyprus property market will also benefit from the recent introduction of a 15% VAT on all property purchases in accordance with the “acquis communautaire”; the VAT is expected to increase property prices by an immediate 5%.

Cyprus changed their currency to the Euro in Janaury 2008 which is being seen as highly beneficial to the island’s property market and the change means that interest rates are likely to coem down as this will be seen as very beneficial to the local buying market as well as the expat and investor market.

Prices may increase by as much as 50% over the next year or so acoording to many analysts who have been predicting a dramatic growth in the property market of Cyprus. In that the island naturally has limited land space these predictions are quite likely to play out as larger portions of the nation are developed and less space is left for further construction projects to take place which in turn strengthens the market.

The island has very strong tourist sector that continues to grow yearly and is know worldwide for being a beautiful place for vacationing – it is also a highly attractive place for investors looking to invest their hard-earned money into a solid performaing market. Together with the location Cyprus also has a thriving business area that has become a popular off-shore location and haven for investors operating ina wide range of sectors. A 3.8% economic growth over the year in the island’s economy has been steady and is expected to continue for the forseable future.

An Investor Service Centre has been set up, which is operated by the Ministry of Commerce, Industry and Tourism. The centre’s function is is to attract and support foreign direct investment. The centre is also responsible for ensuring that investor needs are met on the Island.

The island’s economic stability is further enhanced by a very strong economic performance that has been bolstered not only by its tourist and business markets but also by its red hot property market. Another plus is that Cyprus transitioned to the Euro on Jan. 1, 2008.

The location of the island is also favourable for investing as it is strategically located at the crossroads of three continents. Cyprus is also a member of the European Union offering investors one of the lowest corporate tax rates in the EU. There are many economic reasons for investing in Cyprus: the island’s clement weather, surpassing beauty and the government’s active marketing of the island as a place to invest.