Assetz® News - Cyprus tops list of property hotspots

Cyprus tops list of property hotspots

20th December 2005 |

As property investors look ahead to the start of a new year and begin to form their investment plans for 2006, Cyprus has been tipped to become one of the world's most attractive property markets.

It was reported last week that the Cypriot economy is in the midst of substantial growth with property investment a key contributory factor in its success. Stuart Law, managing director of Assetz, has corroborated these suggestions by predicting an extremely healthy future for the market based on a number of key economic conditions.

"Southern Cyprus is set to become the overseas investment hotspot of 2006, with deposit levels falling to just 15 per cent in many areas for higher income clients and with Swiss Franc mortgages now available with rates of just 3.25 per cent, making borrowing even more affordable," said Mr Law.

The Passenger Survey recently recorded a 3.9 per cent increase in revenue from tourism in Cyprus against the figures from 2004 and Mr Law has suggested this is set to continue in advance of two significant developments planned for the island in the next few years. It is believed that both will significantly improve the prospects of buy-to-let investment on the island.

"The complete redevelopment of Paphos airport, due for completion in 2008, will bring increased levels of tourism to the country and additional investment opportunities, prompting an increase in house prices," he said.

"Entry to the Euro is beckoning in 2007/8 which will pre-empt further price growth. Rental yields remain at a confident eight - nine per cent with a year round rental market in some parts of the island," added Mr Law.

Bulgaria has also been the recipient of intense investment interest in recent months and it was reported yesterday that momentum is building towards a bright future for the Bulgarian real estate market. Mr Law has revealed he expects it to be commercially rewarding for many years to come and has pointed to the year-long profitability of the ski resorts as a particular reason for enthusiasm.

"The ski resorts thrive through the summer months, offering activities such as hiking, fishing and mountain biking. The low cost of living (a pint of beer for example, costs 50 pence), new cheap flight routes and world-class ski facilities, mean Bulgaria is now providing healthy competition to the French and Austrian ski markets," he remarked. Concurrently, however, Mr Law did urge caution when investing in Bulgarian property because the resale market is not yet guaranteed.

Other tips included the Languedoc region of France where Mr Law expects significant growth on the back of relatively low prices and increased accessibility with cheap flight routes.

Conversely, he predicted that investors in Spanish property may "come down to earth with a bump" in 2006 and reasserted his conviction that Florida is a risky investment option because of rising interest rates and concerns relating to natural disasters in the area. He also argued that "trouble is looming South Africa" because of an oversupply of high-density apartments and a fall in demand for rental space in recent months.

In the UK, on the other hand, Mr Law predicts that interest rates will fall twice in 2006 by 0.25 on both occasions. Ray Boulger, technical manager at John Charcol, is even more optimistic in his suggestion that there will be three cuts in interest rates as the Bank of England seeks to control inflation.

Finally, Mr Law gave encouragement to those disappointed by the U-turn on residential property in Sipps, predicting that property funds such as REITs and Property Unit Trusts will transform property in pensions during the next calendar year.

"Low entry levels will make property accessible to those with fairly moderate retirement savings, allowing pension holders to maintain a safe level of diversification instead of ending up with all of their 'eggs in one basket'," concluded Mr Law.