When the property market in Cyprus slows, it’s not just the buyers and sellers which are hit hard. The Republic of Cyprus government has seen its revenue from property taxes drop by 25% in the last year. The government also reported a drop in capital gains tax income, much of which is collected from property sales income.
This may be not such good news for anyone trying to sell their property in Cyprus, but it’s great news for anyone looking to buy. Just as in the UK, it is becoming a buyers’ market in Cyprus, with a wide range of properties on sale at reasonable prices.
However, any drop in asking prices should be offset against the Home Price Index for 2007, which rose an impressive 16.13% in 2007. So, property prices rose dramatically in 2007, only to dip again in 2008, so owners who bought before 2007 have made gains in the long-term.
To make the most of the buying opportunities in a sluggish property market, you need to be more than a little hard-hearted. Chances are, the best bargains to be had are from those desperate to sell their Cyprus villa or apartment for personal reasons. If you have the cash ready to spend, this ensures you can negotiate a good price, but only if you can hold out against the sob stories.
So, what should you consider when buying a property in Cyprus in 2008? The answers are remarkably similar to what you’d expect to do in the current UK market:
1. Buy quality. Look for good build quality, high ‘kerb appeal’ and a high standard of finishes and fittings. Some Cyprus new-build properties built in the boom years were basic at best, and are hard to sell on. Also, quality properties require less maintenance and are generally easier to let.
2. Avoid overambitious developments. Some Cyprus developments are neither picturesque nor have sufficient infrastructure, so suffer from being deserted in the winter months and suffering power cuts and other amenity problems in the summer. In fact, you may wish to avoid new developments altogether and look for more mature properties in central locations of major tourist areas, where the rental potential might be higher.
3. Stick to a realistic budget. A bargain is only a bargain if you can afford it.
4. Look to the future. Both Paphos and Larnaca airports in south Cyprus are currently being expanded, and in addition, new flights by international carriers have been announced. Cheap flight market leaders easyjet have also touched down, offering bargain flights to Cyprus holiday-makers and residents alike.
With greatly increased passenger numbers already arriving in Cyprus in 2008, and cheap flights to Cyprus offering the possibility of long weekend breaks, investing in a Cyprus property now might be a wise move for the serious property investor.
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