For decades, Cyprus has seen civilizations come and go, but it is the latest invasion by foreign investors, especially from Britain that led to the transformation we are seeing today in the country.
For instance, an estimated 60,000 Britons have bought property in Cyprus, the Island of Aphrodite, all being attracted by a much more affordable standard of living as compared to that in the UK. The island boasts everything that property investors, regardless of their personal preferences, could possibly want. Look, there is year-round sunshine, hot temperatures, white sandy beaches that are perfectly complemented by super clear turquoise waters, not to mention a lifestyle and culture that is deeply steeped in history and heritage all of which lure property investors to the island. We haven’t even mentioned the laid-back atmosphere as well as the exotic Mediterranean aura experienced on the island.
Moreover, the juxtaposition of beliefs and cultures, seascapes, and rural retreats do make Cyprus one of the most popular destinations in Europe, especially to UK residents. As a result of all these, the real estate market has been booming in recent years, and that has resulted in property prices going up, but the market has proved quite accommodating to foreign property investors, which is completely opposite of how it used to be a couple of years back.
The property market in Cyprus has played a crucial role in the nation’s economic growth. In the year 2018 alone, the sector was responsible for an estimated 38.5% of the nation’s annual growth rate as well as 16% of its economy Gross Value Added. Now, this year, the COVID-19 pandemic ruined so many economies across the globe, Cypriot’s being one of them. The real estate market on the island was hit really hard, but recently, having contained the virus a bit, the market is making a slow but steady recovery.
Foreign property investors consider Cyprus to be a global property hub, especially given its astounding variety of the types of properties and price ranges to choose from. At present, Limassol captures the biggest share of foreign property investment (37%) while Nicosia comes in second. Foreign property investors continue to be the driving force for the sector, with about 47% of the total transaction activity.
Having earned its place in the island’s sunshine loving heart, Northern Cyprus is one of the most sought-after destinations by property investors. However, though, those investing in this region should be well-advised to consider buying to let and see how their investment will grow. The relatively low cost of living on the island has attracted so many people to Cyprus, especially the northern part of the country, and thus, has led to increased rental yields. And compared to other countries in Europe, Cyprus is considered to be one of the cheapest countries to live in, fuelling a better quality of life and thus making it an all year round holiday favourite. Two-bedroom apartments are the most common in the northern part of the island and that if you are looking to build rental property, this is what you should be considering building. If you are looking to maximize long-term lets, consider areas with critical service providers, or other crucial amenities such as gyms, pools, and parking spaces.
Among the many advantages of investing in the Cypriot property market, especially if you are a foreign investor, is the availability of a well-developed, modern, and efficient banking system. When foreign investors come into the island with the intention of buying property, they, first and foremost seek permission to do so from the council of ministers through a written application. And after that, the investor can now approach the banks. For such investors, the banks do have good mortgage packages that come with pretty low-interest rates, which is definitely good news for the investors. Also, once the investors have been granted permission, they can obtain possession of the property they are about to buy without any restrictions.
Now, here is the thing, just like several other countries in Europe, Cyprus offers a citizenship by investment program, whereby an investor who makes a two million euro investment is able to acquire citizenship in around 6 months. The advantageous thing about acquiring this citizenship is the fact that you will be able to live, work, and study, not only in Cyprus but also anywhere else in Europe. This is a fantastic opportunity that you can pass down to your children, giving them more freedom and opportunity. The best part about the investment is the fact that most of the properties on the island are sold at competitive market prices, and if you wish to rent them, the rental income potential is quite high. Now you don’t have to make a two million euros investment on one property, as you can invest in several properties, provided the amount of all those investments combined isn’t anything below two million euros.
As you may know, when purchasing property overseas, you will definitely need a lawyer who will take you through the legal process, which is quite crucial. Now, with a lawyer, comes some legal fees. The average amount of money asked to cover legal fees is approximately CYP 850, where that amount covers the general argument as well as the sales argument. There are few other costs that must be put into consideration in order to ensure that you will be adequately prepared for the purchase. The costs include: taxes, insurance fees, renovation costs, ownership transfer fees, and many more. On average, these fees are expected to take a little over 15% of the total cost of the property.
On the island, transfer of property ownership after the transaction is completed is done through a very simple procedure that’s done through the land registry office. The contract must be in writing and must be done within 60 days from the day of the purchase. Ensure that you bring your lawyer when signing this contract to avoid last-minute surprise or confusion. When done, the title deed of the property in question is immediately registered in your name, both on the deed and in the government records. Please remember that you will be charged for this transfer, so ensure that you go to the land registry office prepared.