Improving Cyprus economy spurs upscale property development

Published:  26 Dec at 6 PM
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Earlier this year, the Cypriot economy seemed to be heading for the rocks due to its Greek bank liabilities, but is now rebounding in an unexpectedly lively manner.

Expats all over Europe were frightened by the expat savings cash grab, fearing their chosen country would be next in line. The island’s economy quickly went from bad to worse with a bailout, austerity measures, soaring unemployment and hardship for nationals and expats alike.

However, it seems a good number of expats had kept their nest-eggs in their home countries’ financial institutions or offshore, and the expected expat exodus failed to materialise. Sectors such as legal and accountancy services and shipping are slowly getting back to normal as they serve international clients, and tourists are coming back in satisfactory numbers.

Following the collapse of the real estate market in April and May, June figures showed a welcome increase in interest from international buyers. Government incentives such as the reduction in VAT from18 to 5 per cent for overseas buyers purchasing a home have stimulated the market further over the summer months.

New luxury, gated developments aimed at foreign purchase are springing up, concentrating on amenities such as golf courses and superb sea views. Overseas buyers are reassured by the European Commission, International Monetary Fund and European Central Bank’s report that Cyprus is on target for its bail-out terms, and confidence in the market’s economic recovery is growing.

It’s good news for nationals and expats alike, and a good time to buy in before prices begin to rise again. The Cypriot government views the island’s real estate market as a pillar of its economy, and the healthy, pre-crisis style sales figures indicate they may well be right in their assumption.
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