Blue skies ahead

As talks continue on the re-unification of Cyprus, Ginetta Vedrickas talks to developers on both sides of the border

Cyprus may well be one of Europe's sunniest destinations but, as it prepares to enter the EU on 1 May, it is also becoming one of the most hotly debated property destinations. Discussions are underway to reunite the Turkish-occupied side of the island with the south, with an expected referendum next month, prompting specu- lation as to what will happen to the markets on both sides of the island.

Cyprus may well be one of Europe's sunniest destinations but, as it prepares to enter the EU on 1 May, it is also becoming one of the most hotly debated property destinations. Discussions are underway to reunite the Turkish-occupied side of the island with the south, with an expected referendum next month, prompting specu- lation as to what will happen to the markets on both sides of the island.

Developers Leptos have been building in southern Cyprus for more than 45 years and recently won best Cypriot development in the Bentley International Property Awards for Olympus Village, which nestles above Paphos. Prices start from £150,000 for three-bedroom detached homes, but they also have one-bed condominiums in Paphos from £70,000 and luxury villas at Kamares Village for up to £1 million.

Trevor and Marian Gardiner of Gateshead are among the 60,000 Brits who own property in Cyprus. In 1996 they bought a house off-plan in Kamares for £230,000; they estimate it is now worth more than £400,000. "It's been a very good investment but the best return has been the quality of life. Along with the low cost of living, this makes it a wonderful place to spend our retirement."

Undoubtedly, prices have been rising steeply in the south; many British buyers are now turning their attention to the north. "Because of the situation, prices have been depressed and are less than half of the south," says Mehmet Chavush of Medview Homes, which is based in the north.

Predictably, south-based developers believe that these "bargains" come at a price. Marios Vassiliou of Ectoras claims: "It's currently illegal to sell in the north. The title deeds issued by the authority are not legally valid as the state is only recognised by Turkey, and is considered to be an illegal authority by everyone else, so British buyers when they buy property there cannot be sure as to who legally owns the land or the house they are buying. There have been reports of British 'owners' who then get people knocking on their doors, which obviously they don't like. It's a bit like buying a car when you don't know who really owns it. In effect it is buying stolen property."

He believes, however, that any property owners in the north who do suffer a loss in the event of a claim are likely to be compensated. "The problem is that we don't know what will happen. Former owners may well want their property back, they may not want compensation, and they will have the right to go to European courts."

But along with developers in the north, Vassiliou is optimistic that a solution to reunite both sides of the island will be found before 1 May. He also hopes that his company will benefit from reunification: "We are the closest developer to Famagusta, currently a Turkish-occupied ghost town, but if the situation is resolved then prices here will double."

Ectoras sells apartments and villas in the Protaras area, with an emphasis on beach-side locations. Their latest scheme, Blue Water Bay Village, is close to Protaras, Paralmni and Famagusta and prices range between £125,000 and £460,000. Vassiliou believes that, while the south cannot compete with northern prices, the infrastructure is also incomparable: "It's like comparing Mexico with the US. Income here is five times what it is over there; southern Cyprus is a rich European country with an equivalent lifestyle."

Ali O Safa of Medview Homes has this advice: "No one can lose. Around 75 per cent of our buyers are British, they have done their research thoroughly, and are not going to be derailed by propaganda. Either as an investment or as a place to live you can't beat northern Cyprus. My feeling is that any settlement will have positive effects on northern prices, but in the south it could have the effect of dampening prices as people rush to buy in the north."

Among those drawn to the north are Mehmet and Duygu Shahin of Potters Bar, who recently bought a three-bedroom villa near Kyrenia, northern Cyprus. "We are by birth Turkish Cypriots, but have lived in the UK for many years. We have many happy childhood memories of Cyprus and wanted to invest there." The couple believe that a political resolution is imminent and although they admit that they view Cyprus differently they do not see any risk. "Any settlement, whatever it is, will be good for property owners in the north. Locals will be allowed to trade openly and this will have an impact on property."

The Shahins' love of the northern part of the island has been infectious: "Our English friends have been so impressed by our enthusiasm that they have bought the villa next door. They tell us that it is just like England was in the 1950s. Everyone feels so safe there that they leave their doors and windows open."

Pamela Cowig of Chelmsford is another Brit who has bought in the north. "We went on an inspection visit and fell in love with it; the people are so lovely and it is totally different to here." She and her husband bought a three-bedroom detached villa with pool in Kyrenia, where they hope to retire, and are about to buy an investment flat. Cowig believes that "prices are about to soar" although she has some misgivings about EU membership: "It will be good to be able to fly there direct, but we worry that it will become more commercialised."

Leptos marketing manager Michael Cartwright sees only positive effects of EU membership: "There won't be any downward effect on prices. On the contrary, people all over the world, not just the British, who have been wary of Cyprus because of the situation are now buying there - from 1 May, job opportunities will attract many."

Leptos (020-8340 8096) offers a free 'Guide to Property Buying Cyprus', and inspection visits for £120 inclusive of flights, accommodation and meals.

Ectoras Developers: 0035 7238 11855.

Medview Homes: 020-7250 3007; www.medview.tc