Mighty Aphrodite

It has long been associated with the Greek goddess of love, but it's the high returns and new EU status that are attracting UK investors to Cyprus. Ginetta Vedrickas reports
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The Independent Online

There is one property hot spot that continues to attract attention, and not solely because it is one of Europe's sunniest destinations. Cyprus may have over 320 days of sunshine a year but it also has an excellent track record for property investment and developers and agents agree that the market has plenty of growth yet to come.

There is one property hot spot that continues to attract attention, and not solely because it is one of Europe's sunniest destinations. Cyprus may have over 320 days of sunshine a year but it also has an excellent track record for property investment and developers and agents agree that the market has plenty of growth yet to come.

Prices rose by at least 20 per cent in the past year, partially fuelled by last month's entry into the EU as buyers rushed to get in before 1 May, but other factors may also have played a part. The Cypriot government's decision to allow EU members to own businesses outright on the island, coupled with a relaxation of rules with regard to rentals (previously non-Cypriots were legally not entitled to let their properties), encouraged investors. An estimated 60,000 Brits now own property on the island.

Parador Properties sales manager Steve Hamilton believes there are other reasons for the island's appeal: "The place is absolutely gorgeous, you can scuba dive and ski on the same day, and the temperature never drops below 60 degrees. The island's long association with the British means that English is spoken everywhere, the people are friendly, they drive on the left and, now that Cyprus is in the EU, Brits can live, work and own property freely in the southern part."

Parador is the largest selling agent of new-build property in Spain, but opened a Cyprus office only last September. "You can still get properties of an excellent standard at an affordable price," explains Hamilton. "Apartments start from £55,000, semi-detached villas are around £130,000 and wonderful beachside villas are around £150,000. Compared with Spain, that's good value."

Hamilton predicts price rises of another 20 per cent in the coming year. "I met one guy last week who bought eight properties from us. People are looking for sound investments and some are even buying because they can't get on the property ladder in the UK."

Evidence bears this out. A recent survey of overseas buyers by the Property Investor Show North found that 46 per cent of buyers surveyed cited "investment and rental returns" as their primary motivation for buying abroad. These were both factors in persuading Eileen Williams to invest in a one-bedroom apartment at Cybarco's Yialos Village development in Larnaca: "I can't afford to buy in the UK but in Cyprus I don't think that I can go wrong," she says. "A friend of mine bought there two years ago and her property has already risen in value enormously." Williams paid £55,500 for her apartment, which she plans to use for holidays and will also let.

Investment potential may also benefit from increased tourism as EU membership shines the spotlight on newcomer Cyprus. Michael Cartwright of the Leptos Group explains: "The island has now become much more European, with Dutch and Belgian buyers now interested - they like the security of buying within the EU."

Leptos is currently marketing several developments on the island including Leptos Apollo Beach Village, just three miles from Paphos Harbour. It has its own club pool and three-bedroom, two-bathroom terraced villas with garage start from around £215,000.

According to Cybarco, there has been "overwhelming interest" from British buyers for their recent development Hesperides Mansions at Limassol. The first phase, built within mature orange groves, is now on sale: two and three-bedroomed apartments, all with sea or mountain views, go from around £60,000.

Since the Turkish border controls were relaxed and movements between the north and south of the divided country have become easier, there has been much speculation over development potential in the north of the island. Abby Dogruoz of Troy Lake UK, who specialise in northern Cypriot property for British buyers, says: "It is much cheaper, has a lot of natural beauty and it is not over-built like other areas."

Dugruoz's clients include second home-owners and pure investment buyers, who tend to be younger: "Areas such as Famagusta and Nicosia are seeing new bars and restaurants opening and Kyrenia has the old harbour which is always a popular attraction." Prices may have almost doubled in the last 12 months but the area still represents good value: "We currently have a three-bedroom villa in an exclusive area with a swimming pool and land for only £85,000," adds Dugruoz.

But agents selling in the south are sceptical. "Cyprus's land registry is in the south so title deeds issued in the north are not recognised anywhere else," says Steve Hamilton. "We currently consider it to be far too risky for buyers to consider buying in the north, although everyone is hopeful that things will change soon."

Some British buyers believe the growth potential outweighs any risk. Agents Fraser and Beyler began selling in the north in 2001 but buying activity has recently boomed. "We've been incredibly busy," says Sophie Butcher. "Prices here are very reasonable and, most importantly, this part of the island is not over-developed."

For the Leptos Group's book 'Living and working in Cyprus', call 020-8883 2333
Parador Properties: 0800 458 5497. www.paradorproperties.com
Cybarco: 020-8371 9700, www.cybarco.com
Troy Lake: 020-8348 8355, www.troylake.com
Fraser and Beyler: 00390 39281 58882. www.fraserandbeyler.com
Advice on buying abroad will be available at the Property Investor Show North at Manchester's G-Mex centre, 18-20 June ( www.propertyinvestor.co.uk). Tickets £7.50. Book online to receive entry into two seminars with a free show guide worth £5

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