Cyprus property market buoyant, but investors warned to take care

Published:  16 Jan at 6 PM
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Cyprus’s real estate market had a successful 2018 both in the commercial and residential sectors, but potential investors are being warned to take care.

Increased demand for properties during 2018 pushed up prices in both the rental and residential sectors, with sales of homes as well as increased rental returns making investors and incoming expats happy. However, reliable firms in the sector as a whole are warning potential investors to make sure they know the local ropes before dipping their financial toes in the water, especially if they’re new arrivals on the island.

Last year, almost 50 per cent of property sales were made to foreign buyers who accounted for 4.376 transactions out of 9,242 homes sold. As during booming property markets in other European countries, good news brings better news in the form of more willing buyers, many of whom later wish they’d remembered the ancient Roman saying ‘caveat emptor - let the buyer beware. Commercial property investors should also take note, especially if they’re part of the rush to purchase a second passport by making a substantial investment in any form of property.

What Cypriot realtors aren’t telling prospective investors and home buyers is that 2018 wasn’t all about good news, as December’s figures compared unfavourably with the year’s upward trend. Almost 50 per cent fewer sales were recorded than in December 2017’s impressive totals, which were mostly caused by a scramble to get ahead of a nine per cent increase in VAT on property purchase. One year later, interest and sales in Famagusta fell by 73 per cent, Nicosia sales figures dropped by 57 per cent, and Larnaca and Paphos followed with falls of 43 and 34 per cent respectively.

Naturally, real estate agents are now referring to the spectacular falls as simply a statistical blip, but seasoned property investors and experienced potential home owners are equally likely to view them as the start of a downward trend. At best, the 2018 figures should give cause to stop and think, especially if there seem to be issues with ‘lost’ or otherwise absence of title deeds and the entire process is taking far longer than expected. Obviously, getting legal advice and help from an expert in the sector as regards the legal status of the chosen property is essential. Unbiased advice is the best kind, and avoiding law firms linked to investment advice is recommended.
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