Cyprus seems to have shaken off its financial woes and is riding a new wave of prosperity. During its 2013 crisis, it looked as if the island might lose its way, but within three years Cyprus had exited its bail-out and is now seeing another boom.
“Things are definitely better, the economy has improved,” says Nigel Howarth, editor of the website Cyprus Property News. “Cyprus is considered a safe destination, and so it does well with tourism.”
This optimism is most visible in the property market, which has spawned a remarkable number of new residential projects; prices of apartments rose by 7.4 per cent over the past year.
Unlike the lead-up to the island’s EU accession in 2004, which sparked a flurry of investment, the buzz is no longer about how cheaply you can buy. There is now a proliferation of prime and ultra-prime property, with prices to match.
“A lot of development is targeting well-heeled, high net worth buyers from overseas,” says Howarth. “More foreigners than Cypriots have bought property in the last year.”
This influx has been boosted by the government offering a so-called “golden visa”. In return for a property purchase of €300,000 (£264,000), buyers can get residency; for €2 million, and an obligation not to sell for three years, non-EU citizens qualify for an EU passport. The scheme has been popular, attracting around €4 billion worth of investment since 2013.
The government’s “golden visa” is attracting many buyers from overseas.
Another draw for non-nationals is Cyprus’s beneficial tax system. The first €19,500 of earned annual income is tax-free, and pensions above €3,450 are taxed at five per cent.
The hub of activity is Limassol, where property prices have risen around 14 per cent in the past year due to unprecedented demand.
There are currently around 30 projects offering luxury residential, commercial space and leisure amenities in development or in the pipeline. This includes Limassol Landmark and ONE, at 34 and 37 floors respectively, and Limassol Del Mar, which will span 560ft of sea front.
Trilogy, by local firm Cybarco, is an example of why Limassol is being described as “the Manhattan of the Med”. It will comprise three towers of 37 to 39 storeys with 307 residences, commercial and leisure space, resident-only gardens and a public piazza.
“Limassol has changed dramatically in the past few years,” says Michalis Hadjipanayiotou, Cybarco’s chief executive. “Some people say it’s no longer Cyprus, but Limassol still has a nice old town, the sea, and 300 days of sun.”
Prices start at €750,000 for a two-bedroom apartment, and all of them have that sea view.
Nikiforos Pampakas, director of Limassol Marina, one of the first ultra-prime developments to be built here, also believes the high level of new development is positive. “We need expansion. International investors want it, and locals now realise the benefits. Cyprus feels confident, it’s evolved. It offers the whole package to investors looking for a nice lifestyle.”
The selling point of Limassol Marina, which has two-bedroom apartments for sale from €1.7 million and villas with private moorings from €2.9 million, is that it is one of the few facilities for large yachts in this part of the Mediterranean.
The success of developments in Limassol has spurred on large-scale projects elsewhere, such as Larnaca Port, a huge new marina with mixed-use development. Plans for Larnaca also include hotels, shopping malls and luxury residential blocks. Larnaca city offers more reasonable prices on properties and on living expenses as it is much cheaper to live in than Limassol, Paphos and Nicossia. Larnaca also offers beautiful beaches and great vacation opportunities for families as well as being centrally located so that driving to the capital or to other towns is only minutes away.
Paphos is following suit, by resurrecting its long-stalled marina project and considering big development proposals, such as Eden City. Billed as the largest site of its kind in the Mediterranean, the 200-acre hotel and residential project will have three separate areas, including a self-contained island resort and a new district with business, educational and cultural centres.
If you want to take advantage of what the island offers, it’s still possible to find apartments for under €100,000 and small villas at around €160,000 in the suburbs of Paphos and Limassol, or surrounding villages. Problems and delays with title deeds in Cyprus are well documented, so it’s advisable to get solid legal advice before committing to a purchase.At Hidden Properties, we have lawyers and property experts who will advise you at each step of the way.
The level of construction has also raised concerns among residents that overdevelopment will strain the environment and infrastructure, and that Cyprus is in the midst of another bubble. “Some people are predicting another crash in two or three years,” says Howarth. “But many still consider Cyprus a good bet for investment. It offers a good lifestyle and it could do well.”
Hadjipanayiotou claims this type of growth is exactly what the island needs after the economic problems of the past. “People are uncomfortable with change, but to get out of the crisis the economy needed to grow. Attracting overseas investment is beneficial.”